Ch4 Termination of Employment

7/23/2019 Ch4 Termination of Employment

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Chapter Four

TERMINATION OF EMPLOYMENT

OPICS PER SYLLABUS

A. Employer-employee relationship

1. Four-fold test2. Kinds of employment

a. Probationaryb. Regular c. Project employmentd. easonale. !asualf. Fi"ed-term

#. $ob contractinga. Articles 1%& to 1%' of the (abor !ode

b. )epartment *rder +o. 1,-Ac. )epartment !ircular +o. %1-12d. Effects of (abor-*nly !ontractinge. rilateral relationship in job contracting

A.

EP(*/ER-EP(*/EE RE(A0*+0P

1.

Four-Fold est

. FOUR-FOLD TEST.

a. Selection and engagement of the employee;

b. Payment of age! o" !ala"ie!;

c. E#e"ci!e of the poe" of di!mi!!al; o"

d. E#e"ci!e of the poe" to cont"ol the employee$! cond%ct.1

The!e te!t!& hoe'e"& a"e not fool-p"oof a! they admit of e#ception!.

(. )O*TROL TEST& T+E )O*TROLL,* TEST.

The “control test” i! the cont"olling te!t. ,t add"e!!e! the i!!%e of hethe" the

employe" cont"ol! o" ha! "e!e"'ed the "ight to cont"ol the employee not only a! to

the "e!%lt of the o" to be done b%t al!o a! to the mean! and method! by hich the!ame i! to be accompli!hed.2

/. SO0E PR,*),PLES O* E0PLO1ER-E0PLO1EE REL2T,O*S+,P.

a. The"e i! no %nifo"m te!t p"e!c"ibed by la o" 3%"i!p"%dence to dete"mine the

e#i!tence of employe"-employee "elation!hip.3

b. The e#i!tence of the employe"-employee "elation!hip i! e!!ential in that it

comp"i!e! a! the 3%"i!dictional ba!i! fo" "eco'e"y %nde" the la. Only ca!e!

a"i!ing f"om !aid "elation!hip a"e cogni4able by the labo" co%"t!.4

c. The "elation!hip of employe" and employee i! cont"act%al in nat%"e. ,t may be an

o"al o" "itten cont"act. 2 "itten cont"act i! not nece!!a"y fo" the c"eation and

'alidity of the "elation!hip.5

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d. Stip%lation in a cont"act i! not cont"olling in dete"mining e#i!tence of the

"elation!hip. The employment !tat%! of a pe"!on i! de5ned and p"e!c"ibed by la

and not by hat the pa"tie! !ay it !ho%ld be.6

e. The mode of paying the !ala"y o" compen!ation of a o"e" doe! not p"ecl%de

e#i!tence of employe"-employee "elation!hip. Th%!& payment by commi!!ion7 o"

on a piece-"ate ba!i!8 o" on a 6no o"& no pay7 9 ba!i! doe! not a8ect e#i!tence of employment "elation!hip.

f. Retaine" fee a""angement doe! not gi'e "i!e to employment "elation!hip. 10

9. )2SES :+ERE E0PLO10E*T REL2T,O*S+,P E;,STS.

Folloing the right-of-control test & the S%p"eme )o%"t ha! fo%nd that employment

"elation!hip e#i!t! in the folloing ca!e!<

a. Di!patche"! of a t"an!po"tation company.11

b. Pe"!on! paid on “boundary system” ba!i! in "elation to the t"an!po"t ope"ato" !%ch

a! 3eepney d"i'e"! and cond%cto"!&12 ta#i d"i'e"!&13a%to-cale!a d"i'e"&14 and b%!

d"i'e".15 Unde" the “boundary system,” the "elation!hip beteen the d"i'e" andcond%cto" of a b%! and the one" the"eof i! not that of le!!ee and le!!o" b%t that

of employee and employe".16

c. 0%!ician! employed by a company p"od%cing motion pict%"e! fo" p%"po!e! of

maing m%!ic "eco"ding! fo" title m%!ic& bacg"o%nd m%!ic& m%!ical n%mbe"!&

5nale m%!ic and othe" fo"m! of m%!ic itho%t hich a motion pict%"e i! not

complete.17

d. Fi!he"men-c"e ho "ende"ed !e"'ice! in 'a"io%! capacitie! =pat"on>pilot& ma!te"

5!he"man& !econd 5!he"man& chief enginee"& and 5!he"man? aboa"d the 5!hing

'e!!el! of a company engaged in “trawl” 5!hing and ho!e compen!ation a!

paid in ca!h on pe"cent commi!!ion ba!i!.18

e. Ste'edo"e!& altho%gh !%pplied to the company by the labo" o"gani4ation

compo!ed of 'a"io%! labo" %nion!& a"e employee! of the company.19

f. Re!ident phy!ician!. - The"e i! employe"-employee "elation!hip beteen "e!ident

phy!ician! and the t"aining ho!pital! %nle!!<

1. the"e i! a t"aining ag"eement beteen them; and

(. the t"aining p"og"am i! d%ly acc"edited o" app"o'ed by the app"op"iate

go'e"nment agency.20

g. Employee! of coope"ati'e!& b%t not it! membe"! %nle!! the membe"! a"e al!o

employee! the"eof.21

h. ,n!%"ance agent.22

2.

K0+) *F EP(*/E+

. F,@E =A? E*ER2L )L2SS,F,)2T,O*S OF E0PLO10E*T.

The"e a"e 5'e =A? cla!!i5cation! of employment.23 2"ticle (BC p"o'ide! fo" fo%" =9?

ind! of employee!&24 to it<

=a? Regularemployee! "efe""ing to tho!e ho ha'e been 6engaged to pe"fo"m

acti'itie! hich a"e %!%ally nece!!a"y o" de!i"able in the %!%al b%!ine!! o" t"ade

of the employe"7;



















































=b? Project employee! "efe""ing to tho!e 6ho!e employment ha! been 5#ed fo" a

!peci5c p"o3ect o" %nde"taing& the completion o" te"mination of hich ha! been

dete"mined at the time of the engagement of the employee7;

=c? Seasonal employee! "efe""ing to tho!e ho o" o" pe"fo"m !e"'ice! hich a"e

!ea!onal in nat%"e& and the employment i! fo" the d%"ation of the !ea!on; and

=d? Casualemployee! "efe""ing to tho!e ho a"e not "eg%la"& p"o3ect& o" !ea!onal

employee!.25

2 5fth one& xed-term employee!& m%!t be added to the abo'e en%me"ation.26 Thi!&

hoe'e"& i! not p"o'ided in the Labo" )ode b%t "ecogni4ed only in 3%"i!p"%dence.27

(. )L2SS,F,)2T,O* OF E0PLO10E*T 2S TO *2TURE OF :OR.

2cco"ding to the (C1/ ca!e of 02 *eto"& ,nc. '. Pab"iga&

28 p%"!%ant to 2"ticle

(BC& anothe" cla!!i5cation may be fo"med in acco"dance ith the nat%"e of employment& to

it<

=1? Employee! pe"fo"ming acti'itie! hich a"e %!%ally nece!!a"y o" de!i"able in the

employe"$! %!%al b%!ine!! o" t"ade can eithe" be "eg%la"& p"o3ect o"

!ea!onal employee!; hile

=(? Tho!e pe"fo"ming acti'itie! not %!%ally nece!!a"y o" de!i"able in the employe"$!

%!%al b%!ine!! o" t"ade a"e& a! a gene"al "%le& ca!%alemployee!.

The "ea!on fo" thi! di!tinction may not be "eadily comp"ehen!ible to tho!e ho

ha'e not ca"ef%lly !t%died the!e p"o'i!ion!; only employe"! ho con!tantly need the

!peci5ed ta!! to be pe"fo"med can be 3%!ti5ably cha"ged to %phold the con!tit%tionally

p"otected !ec%"ity of ten%"e of the co""e!ponding o"e"!. The con!e%ence of the

di!tinction i! fo%nd in 2"ticle (G of the Labo" )ode.29 :ith "e!pect to the acti'itie!

of p"o3ectemployee!& they may o" may not be %!%ally nece!!a"y o" de!i"able in the %!%al

b%!ine!! o" t"ade of the employe"& a! di!c%!!ed by the )o%"t in !ome ca!e!. 30

a.

PR*A0*+AR/ EP(*/E+ 31

. *2TURE OF PROH2T,O*2R1 E0PLO10E*T.

2 p"obationa"y employee i! one ho& fo" a gi'en pe"iod of time& i! on ob!e"'ation&

e'al%ation and t"ial by an employe" d%"ing hich the employe" dete"mine! hethe" o" not

he i! %ali5ed fo" pe"manent employment. D%"ing the p"obationa"y pe"iod& the employe" i!

gi'en the oppo"t%nity to ob!e"'e the !ill& competence& attit%de and 5tne!! of the

p"obationa"y employee hile the latte" !ee! to p"o'e to the employe" that he ha! the

%ali5cation! to meet the "ea!onable !tanda"d! fo" pe"manent employment.32

(. PROH2T,O*2R1 PER,OD.

2! a gene"al "%le& it !ho%ld not e#ceed !i# =I? month! f"om the date the employee

!ta"ted o"ing.33 One become! a "eg%la" employee %pon completion of hi! !i#-month

pe"iod of p"obation.34

/. E;)EPT,O*S.

The I-month pe"iod p"o'ided in 2"ticle (B1 admit! of ce"tain e#ception! !%ch a!<

1. :hen the employe" and the employee ag"ee on a !ho"te" o" longe" pe"iod;

(. :hen the nat%"e of o" to be pe"fo"med by the employee "e%i"e! a longe"

pe"iod;

/. :hen a longe" pe"iod i! "e%i"ed and e!tabli!hed by company policy.

,f not one of the e#ceptional ci"c%m!tance! abo'e i! p"o'en& the employee ho!eemployment e#ceed! !i# =I? month! i! %ndo%btedly a "eg%la" employee.35




























H%i!e" '. +on. Leoga"do.

36 - The p"obationa"y pe"iod of 1B month! a!

con!ide"ed 'alid in the light of the nat%"e of employment of the p"obationa"y employee!.

The company he"e i! engaged in the p%blication of ad'e"ti!ement! in PLDT$! ello Page!

Telephone Di"ecto"ie!. Solicited ad! a"e p%bli!hed a yea" afte" the !ale ha! been made and

only then can the company be able to e'al%ate the eJciency& cond%ct and !elling ability of

the !ale! "ep"e!entati'e!& the e'al%ation being ba!ed on the p%bli!hed ad!.9. PROH2T,O*2R1 PER,OD& +O: RE)O*ED 2*D )O0PUTED.

The I-month p"obationa"y pe"iod !ho%ld be "econed from the date of

aointment u to the same calendar date of the !

th

month following"”

37

A. PROH2T,O*2R1 E0PLO10E*T @S. F,;ED-TER0 E0PLO10E*T.

The intention of the pa"tie! =employe" and employee? i! mate"ial. Hoth in'ol'e 5#ed

pe"iod in te"m! of d%"ation of employment. +oe'e"& inp"obationa"y employment& the

pa"tie! intend to mae thei" "elation!hip "eg%la" afte" the lap!e of the pe"iod. ,n 5#ed-

te"m employment& no !%ch intention e#i!t! and the "elation!hip a%tomatically te"minate! at

the e#pi"ation of the pe"iod.

2 p"obationa"y pe"iod cannot be !tip%lated ithin the 5#ed pe"iod of employment.38

I. SO0E PR,*),PLES O* PROH2T,O*2R1 E0PLO10E*T.

The p"obationa"y pe"iod may be e#tended b%t only %pon the m%t%al ag"eement by the

employe" and the p"obationa"y employee.39

P%"po!e and not length of the p"obationa"y pe"iod i! mate"ial. 40

2n employee ho i! alloed to o" afte" a p"obationa"y pe"iod i! con!ide"ed a

"eg%la" employee.41

Employment i! deemed "eg%la" if the employment cont"act ha! no !tip%lation on

p"obationa"y pe"iod.42

Employee i! deemed "eg%la" ab!ent any cont"act to p"o'e p"obationa"y employment. 43

Repetiti'e "ehi"ing of a p"obationa"y employee mean! he ha! become a "eg%la"employee.44

Reg%la" o"e"! of p"e'io%! one" of b%!ine!! may be hi"ed a! p"obationa"y

employee! of ne one".45

P"obationa"y employment cannot be ad innitum.46

. TER0,*2T,O* OF PROH2T,O*2R1 E0PLO10E*T.

a. Sec%"ity of ten%"e of p"obationa"y employee!.

:ithin the limited legal I-month p"obationa"y pe"iod& p"obationa"y employee! a"e

entitled to !ec%"ity of ten%"e notith!tanding thei" limited ten%"e and non-pe"manent

!tat%!.47 +ence& d%"ing thei" p"obationa"y employment& they cannot be di!mi!!ed e#cept fo"

3%!t o" a%tho"i4ed ca%!e o" hen he fail! to %alify a! a "eg%la" employee. 48

b. "o%nd! to te"minate p"obationa"y employment.

Unde" 2"ticle (B1& a p"obationa"y employee may be te"minated only on th"ee =/?

g"o%nd!& to it<

1. Fo" a 3%!t ca%!e; o"

(. Fo" a%tho"i4ed ca%!e; o"

/. :hen the p"obationa"y employee fail! to %alify a! a "eg%la" employee in

acco"dance ith "ea!onable !tanda"d! made non by the employe" to the

employee at the !ta"t of the employment.49

c. Some p"inciple! on te"mination of employment of p"obationa"y employee!.

1. P"oced%"al d%e p"oce!! i! "e%i"ed only in the ca!e of

the 5"!t and !econd g"o%nd! =di!mi!!al d%e to 3%!t o" a%tho"i4ed ca%!e? .




































The thi"dg"o%nd =fail%"e to %alify a! a "eg%la" employee? doe! not "e%i"e notice

and hea"ing. D%e p"oce!! of la fo" the third g"o%nd con!i!t! of maing the

"ea!onable !tanda"d! e#pected of the employee d%"ing hi! p"obationa"y

employment non to him at the time of hi! engagement.50

(. Te"mination to be 'alid m%!t be done rior to lap!e of p"obationa"y pe"iod.51

/. Te"mination a fe day! afte" lap!e of p"obationa"y pe"iod cannot be done itho%td%e p"oce!! a! he ha! al"eady become a "eg%la" employee by that time. 52

9. Pe"empto"y and a"bit"a"y te"mination of p"obationa"y employee! i! not alloed. 53

A. *o obligation to pay %ne#pi"ed po"tion in ca!e of 'alid te"mination p"io" to lap!e

of p"obationa"y pe"iod.54

I. #gabon doct"ine55 applie! if di!mi!!al of p"obationa"y employee fo" a 3%!t ca%!e i!

itho%t d%e p"oce!!. Th%!& the te"mination i! con!ide"ed legal b%t the employee

ill be aa"ded an indemnity in the fo"m of nominal damage! of P/C&CCC.CC.56

. $a%a doct"ine57 applie! if di!mi!!al of p"obationa"y employee fo" an a%tho"i4ed

ca%!e i! itho%t d%e p"oce!!. The amo%nt of indemnity i! highe"< PAC&CCC.CC.

b.

RE34(AR EP(*/E+58

. T:O =(? ,*DS OF REUL2R E0PLO1EES.

The "eg%la" employee! %nde" 2"ticle (BC con!i!t of the folloing<

=1? Tho!e engaged to pe"fo"m acti'itie! hich a"e %!%ally nece!!a"y o" de!i"able in

the %!%al b%!ine!! o" t"ade of the employe"; and

=(? Tho!e ho ha'e "ende"ed at lea!t one =1? yea" of !e"'ice& hethe" !%ch !e"'ice i!

contin%o%! o" b"oen& ith "e!pect to the acti'ity in hich they a"e employed.59

(. T+REE =/? :21S OF 2TT2,*,* REUL2R E0PLO10E*T.

Unde" the Labo" )ode& regular emloyment may be attained in eithe" of th"ee =/?

ay!& namely<

1. Hy nat%"e of o". - The employment i! deemed "eg%la" hen the employee

ha! been engaged to pe"fo"m acti'itie! hich a"e %!%ally nece!!a"y o" de!i"able

in the %!%al b%!ine!! o" t"ade of the employe".60

(. Hy pe"iod of !e"'ice. - The employment i! "econed a! "eg%la" hen the

employee ha! "ende"ed at lea!t one =1? yea" of !e"'ice& hethe" !%ch !e"'ice i!

contin%o%! o" b"oen& ith "e!pect to the acti'ity in hich he i! employed and hi!

employment !hall contin%e hile !%ch acti'ity e#i!t!.61

/. Hy p"obationa"y employment. - The employment i! con!ide"ed "eg%la" hen

the employee i! alloed to o" afte" a p"obationa"y pe"iod.62

/. SO0E PR,*),PLES O* REUL2R E0PLO10E*T.

a. a p"e!%me! "eg%la"ity of employment. The p"e!%mption ha'ing been

made by the la it!elf& it follo! that an employee i! deemed "eg%la" by ope"ation

of la the moment the fact i! e!tabli!hed that the nat%"e of hi! o" i! di"ectly

"elated to the p"incipal b%!ine!! of the employe".63

b. The ph"a!e 6to pe"fo"m acti'itie! hich a"e %!%ally nece!!a"y o" de!i"able

in the %!%al b%!ine!! o" t"ade of the employe"7 incl%de! pe"fo"mance of

pe"iphe"al 3ob! indi"ectly "elated to the p"incipal b%!ine!! of employe".64


































c. *o decla"ation o" appointment pape" nece!!a"y to mae one a "eg%la"

employee.65

d. Fi#ed-pe"iod employment i! the e#ception to the "%le that an employee

become! "eg%la" by "ea!on of nat%"e of o" o" pe"iod of

employment66 beca%!e in 5#ed-pe"iod employment& the!e facto"! a"e not

deci!i'e indicato"! of "eg%la"ity of employment. The deci!i'e dete"minant i!

the day certain ag"eed %pon by the pa"tie! fo" the commencement and

te"mination of thei" employment "elation!hip& a day certain being %nde"!tood to

be 6that which must necessarily come, although it may not be %nown when" 767

e. :"itten o" o"al ag"eement i! immate"ial to dete"mine "eg%la"ity of employment.

The ph"a!e “the ro&isions of written agreement to the contrary notwithstanding and

regardless of the oral agreement of the arties” in 2"ticle (BC !imply mean! that

i""e!pecti'e of any "itten o" o"al ag"eement !tating that the employment i! not

"eg%la"& once the fact i! e!tabli!hed that the employee ha! been engaged to

pe"fo"m acti'itie! hich a"e %!%ally nece!!a"y o" de!i"able in the %!%al b%!ine!!

o" t"ade of the employe"& hi! employment i! "eg%la" by "ea!on of it! nat%"e.68

f. +oe'e"& the"e i! a need to e#ec%te a "itten employment cont"act if the

intention i! to !tip%late on !%ch othe" ind! of employment !%ch a! p"obationa"y&

p"o3ect& !ea!onal& ca!%al o" 5#ed-te"m& a! the ca!e may be& beca%!e the ab!ence

the"eof ill mae the "elation!hip that of "eg%la" employment. ,t i! only by

p"o'ing the te"m! and condition! of the cont"act that the gene"al p"e!%mption

that the "elation!hip i! "eg%la" in nat%"e o%ld be e8ecti'ely di!pelled.

K%"i!p"%dence abo%nd! he"e the non-p"e!entation of the "itten cont"act a!

held a! e'idence that the !tat%! of employment i! not hat it p%"po"t! to be& that

i!& p"obationa"y& p"o3ect& !ea!onal& ca!%al o" 5#ed-te"m b%t "eg%la" employment.

g. The doct"ine of adhe!ion69

applie! to employment cont"act!.70

,t m%!t beempha!i4ed& hoe'e"& that the "%le on the inte"p"etation o" con!t"%ction of

cont"act! of adhe!ion doe! not apply hen the !tip%lation! contained in a

cont"act a"e not ob!c%"e o" ambig%o%!.71He!ide!& a cont"act of adhe!ion i! not

p"ohibited er se" 72

h. The act of hi"ing and "e-hi"ing the employee! o'e" a pe"iod of time itho%t

con!ide"ing them a! "eg%la" employee! e'idence! bad faith on the pa"t of the

employe".73

i. 0anne" and method of payment of age o" !ala"y i! immate"ial to the i!!%e of

hethe" the employee i! "eg%la" o" not.74

c.

PR*$E! EP(*/E+75

. )O*)EPT.

P"o3ect employee! a"e tho!e hi"ed<

1. fo" a !peci5c p"o3ect o" %nde"taing; and

(. the completion o" te"mination of !%ch p"o3ect ha! been dete"mined at the time

of thei" engagement.76

(. T:O =(? )2TEOR,ES OF PROKE)T E0PLO1EES.

,n o"de" to !afeg%a"d the "ight! of o"e"! again!t the a"bit"a"y %!e of theo"d 6p"o3ect7 to p"e'ent employee! f"om attaining the !tat%! of "eg%la" employee!&

































employe"! claiming that thei" o"e"! a"e p"o3ect employee! !ho%ld not only p"o'e that the

duration and scoe of the emloyment was secied at the time they were engaged & b%t al!o that

the"e a! indeed a 6p"o3ect. 7

77

The to =(? catego"ie! of p"o3ect employee! on the ba!i! of 6p"o3ect7 fo" hich they

ha'e been engaged to pe"fo"m a"e a! follo!<

=1? 2 pa"tic%la" 3ob o" %nde"taing that i! ithin the "eg%la" o" %!%al b%!ine!! of

the employe" company& b%t hich i! di!tinct and !epa"ate& and identi5able

a! !%ch& f"om the othe" %nde"taing! of the company ; o"

=(? 2 pa"tic%la" 3ob o" %nde"taing that i! not ithin the "eg%la" b%!ine!! of the

co"po"ation.

78

In the realm of business and industry, we note that ‘project’ could refer to one or

the other of at leasttwo (2) distinguishable types of activities.Firstly,aproject

could refer to a particular job or undertaking that iswithin the regular or usual

business of the employer company, but which is distinct and separate, and

identifiable as such, from the other undertakings of the company.Such job or

undertaking begins and ends at determined or determinable times. The typical example

of this first type of project is a particular construction job or project of a construction

company. A construction company ordinarily carries out two or more [distinct]

identifiable construction projects:e.g., a twenty-five-storey hotel in Makati; a residential

condominium building in Baguio City; and a domestic air terminal in Iloilo City.

Employees who are hired for the carrying out of one of these separate projects, the

scope and duration of which has been determined and made known to the employees

at the time of employment, are properly treated as ‘project employees,’ and their

services may be lawfully terminated at completion of the project.

The term ‘project’ could also refer to,secondly, a particular job or undertaking

that isnot within the regular business of the corporation. Such a job or undertaking

must also be identifiably separate and distinct from the ordinary or regular businessoperations of the employer. The job or undertaking also begins and ends at determined

or determinable times.79

/. L,T0US TEST OF PROKE)T E0PLO10E*T.

The litm%! te!t of p"o3ect employment& a! di!ting%i!hed f"om "eg%la" employment& i!

hethe" o" not the p"o3ect employee! e"e a!!igned to ca""y o%t a !peci5c p"o3ect o"

%nde"taing& the d%"ation and !cope of hich e"e !peci5ed at the time the employee! e"e

engaged fo" that p"o3ect.80 2 t"%e p"o3ect employee !ho%ld be a!!igned to a p"o3ect hich

begin! and end! at dete"mined o" dete"minable time! and be info"med the"eof at the time

of hi"ing.81

9. PROKE)T E0PLO10E*T @S. REUL2R E0PLO10E*T.

1. The !e"'ice! of p"o3ect employee! a"e cote"mino%! ith the p"o3ect o" any pha!e

the"eof and may be te"minated %pon the end o" completion of the p"o3ect o" pha!e the"eof

fo" hich they e"e hi"ed. Reg%la" employee!& in cont"a!t& en3oy !ec%"ity of ten%"e and a"e

legally entitled to "emain in the !e"'ice of thei" employe" and to hold on to thei" o" o"

po!ition %ntil thei" !e"'ice! a"e te"minated by any of the mode! of te"mination of !e"'ice

"ecogni4ed %nde" the Labo" )ode.82

(. D%e p"oce!! liei!e 'a"ie!. ,n ca!e of roject emloyment & if the te"mination i!

b"o%ght abo%t by the completion of the p"o3ect o" any pha!e the"eof& d%e p"oce!! i!

complied ith e'en if no p"io" notice of te"mination i! !e"'ed. Fo" te"mination

of regular employment& the d%e p"oce!! "e%i"ed o%ld nece!!a"ily depend on the g"o%ndcited. ,f the te"mination i! fo" 3%!t ca%!e& d%e p"oce!! applicable to 2"ticle (B( te"mination!


















applie!. ,f d%e to a%tho"i4ed ca%!e& d%e p"oce!! applicable to 2"ticle! (B/ and (B9

te"mination! !ho%ld be folloed.

A. ,*D,)2TORS OF PROKE)T E0PLO10E*T.

a. I indicato"! of p"o3ect employment.

Eithe" one o" mo"e of the folloing ci"c%m!tance!& among othe"!& may becon!ide"ed a! indicato">! that an employee i! a p"o3ect employee<

1. The d%"ation of the !peci5c>identi5ed %nde"taing fo" hich the o"e" i!

engaged i! "ea!onably dete"minable.

(. S%ch d%"ation& a! ell a! the !peci5c o">!e"'ice to be pe"fo"med& a"e de5ned in

an employment ag"eement and i! made clea" to the employee at the time of

hi"ing.

/. The o">!e"'ice pe"fo"med by the employee i! in connection ith the pa"tic%la"

p"o3ect o" %nde"taing fo" hich he i! engaged.

9. The employee& hile not employed and aaiting engagement& i! f"ee to o8e" hi!

!e"'ice! to any othe" employe".

A. The te"mination of hi! employment in the pa"tic%la" p"o3ect>%nde"taing i!

"epo"ted to the Regional OJce of the Depa"tment of Labo" and Employment

ha'ing 3%"i!diction o'e" the o"place& ithin thi"ty =/C? day! folloing the date of

hi! !epa"ation f"om o"& %!ing the p"e!c"ibed fo"m on employee!$ te"mination!

o" di!mi!!al! o" !%!pen!ion!.

I. 2n %nde"taing in the employment cont"act by the employe" to pay completion

bon%! to the p"o3ect employee a! p"acticed by mo!t con!t"%ction companie!. 83

b. Some p"inciple! on p"o3ect employment.

1. P"o3ect employee! !ho%ld be info"med of thei" !tat%! a! !%ch at inception of theemployment "elation!hip.84

(. The"e m%!t be a "itten cont"act of p"o3ect employment !tating the d%"ation of

the p"o3ect employment a! ell a! the pa"tic%la" o" o" !e"'ice to be

pe"fo"med.85

/. 2 "itten p"o3ect employment cont"act i! an indi!pen!able "e%i"ement.86

9. Fail%"e to p"e!ent cont"act of p"o3ect employment mean! that employee! a"e

"eg%la".87

A. Reg%la" employment i! incon!i!tent ith p"o3ect employment. ,n othe" o"d!& a

"eg%la" employee cannot be at the !ame time a p"o3ect employee.88

I. ,nte"'al! in employment cont"act! indicate p"o3ect employment.89

. )ontin%o%!& a! oppo!ed to inte"mittent& "ehi"ing !ho! that employee i! "eg%la".90

B. “Project-to-roject” ba!i! of employment i! 'alid.91

G. Length of !e"'ice i! not a cont"olling dete"minant of employment ten%"e.92

1C. P"o3ect employment !ho%ld not be conf%!ed ith 5#ed-te"m employment to

3%!tify contin%o%! "ehi"ing of !o-called p"o3ect employee!.93

c. 6:o" pool7 p"inciple.

2! a gene"al "%le& employe"! may o" may not fo"m a “wor% ool"” 2 “wor% ool” "efe"!

to a g"o%p of o"e"! f"om hich an employe" lie a con!t"%ction company d"a! the

o"e"! it deploy! o" a!!ign! to it! 'a"io%! p"o3ect! o" any pha!e>! the"eof. 0embe"! of

a “wor% ool” may con!i!t of<





























1. 'on-roject employee! o" employee! fo" an indenite pe"iod. ,f they a"e employed

in a pa"tic%la" p"o3ect& the completion of the p"o3ect o" of any pha!e the"eof ill

not mean !e'e"ance of employe"-employee "elation!hip.

(. Project employee!. The!e o"e"! in the o" pool ho a"e employed in a

pa"tic%la" p"o3ect o" in any pha!e the"eof a"e con!ide"ed a! !%ch if they a"e f"ee

to lea'e anytime and o8e" thei" !e"'ice! to othe" employe"!.94

0e"e membe"!hip in a “wor% ool” doe! not "e!%lt in the o"e"!$ becoming "eg%la"

employee! by "ea!on of that fact alone.95 +oe'e"& %nde" e!tabli!hed 3%"i!p"%dence& a

p"o3ect employee ho i! a membe" of a “wor% ool,” may attain regular !tat%! a! a p"o3ect

employee. Thi! ind of employee i! non a! regular roject emloyee"”

I. TER0,*2T,O* OF PROKE)T E0PLO10E*T.

1. P"o3ect employee! en3oy !ec%"ity of ten%"e only d%"ing the te"m of thei" p"o3ect

employment.96

(. ,f the p"o3ect o" the pha!e the"eof on hich the p"o3ect employee i! o"ing ha!

not yet been completed and hi! !e"'ice! a"e te"minated itho%t 3%!t o"a%tho"i4ed ca%!e and the"e i! no !hoing that hi! !e"'ice! a"e %n!ati!facto"y&

!%ch te"mination i! con!ide"ed illegal& hence& the p"o3ect employee i! entitled to

"ein!tatement to hi! fo"me" po!ition o" !%b!tantially e%i'alent po!ition. ,f the

"ein!tatement i! no longe" po!!ible& the employee i! entitled to hi! !ala"ie! fo" the

%ne#pi"ed po"tion of the ag"eement.97

/. P"o3ect employee! a"e not& by la& entitled to !epa"ation pay if thei" !e"'ice! a"e

te"minated a! a "e!%lt of the completion of the p"o3ect o" any pha!e the"eof in

hich they a"e employed. The "ea!on i! that thei" !e"'ice! a"e deemed

cote"mino%! ith the p"o3ect o" pha!e the"eof .98

9. P"o3ect employee! ha'e p"e!%mably become "eg%la" employee! if they a"e alloed

to o" beyond the completion of the p"o3ect o" any pha!e the"eof to hich they

e"e a!!igned o" afte" the “day certain” hich they and thei" employe" ha'e

m%t%ally ag"eed fo" it! completion. +a'ing become "eg%la" employee!& they can

no longe" be te"minated on the ba!i! of the completion of the p"o3ect o" any

pha!e the"eof to hich they e"e deployed.99

A. 2d'ance notice of te"mination of p"o3ect employment i! not "e%i"ed.100

I. Repo"t to DOLE on te"mination of p"o3ect employee! i! "e%i"ed.101 Repo"t !ho%ld

be made afte" e'e"y completion of p"o3ect o" pha!e the"eof.102

. Payment of completion bon%! i! an indicato" of p"o3ect employment.103

B. H%"den of p"oof in te"mination of p"o3ect employment "e!t! on the employe".104

d.

EA*+A( EP(*/E+ 105

. )O*)EPT.

2 6seasonal emloyee7 i! one ho!e o" o" !e"'ice to be pe"fo"med i! !ea!onal in

nat%"e and the employment i! fo" the d%"ation of the !ea!on. 106

(. REUL2R SE2SO*2L E0PLO10E*T.

Sea!onal employee! may attain "eg%la"ity in thei" employment a! !%ch. Once they

attained !%ch "eg%la"ity& they a"e p"ope"ly to be called“regular seasonal emloyees"”

Reg%la" !ea!onal o"e"! a"e called to o" f"om time to time& mo!tly d%"ing

ce"tain !ea!on. The nat%"e of thei" "elation!hip ith the employe" i! !%ch that d%"ing o8-

!ea!on& they a"e tempo"a"ily laid o8 b%t they a"e "e-employed d%"ing the !ea!on o" hen
































thei" !e"'ice! may be needed. They a"e not& !t"ictly !peaing& !epa"ated f"om the !e"'ice b%t

a"e me"ely con!ide"ed a! on lea'e of ab!ence itho%t pay %ntil they a"e "e-employed. Thei"

employment "elation!hip i! ne'e" !e'e"ed b%t only !%!pended. 2! !%ch& they can be

con!ide"ed a! being in the "eg%la" employment of the employe".107

/. REU,S,TES FOR REUL2R,T1 OF E0PLO10E*T OF SE2SO*2L E0PLO1EES.

The ca!e of +acienda Fatima '. *ational Fede"ation of S%ga"cane :o"e"! -

Food and ene"al T"ade&

108 en%nciate! the "e%i!ite! in o"de" that a !ea!onal employee

may be deemed to ha'e attained "eg%la"ity of employment a! !%ch& th%!<

1. The !ea!onal employee !ho%ld pe"fo"m o" o" !e"'ice! that a"e !ea!onal in

nat%"e; and

(. They m%!t ha'e al!o been employed fo" mo"e than one =1? !ea!on.

Hoth "e%i!ite! !ho%ld conc%" in o"de" that the employee may be cla!!i5ed

a! "eg%la" !ea!onal employee . ,f the !ea!onal o"e" i! engaged only fo" the d%"ation of

one =1? !ea!on& then& he doe! not attain "eg%la"ity of employment a! a !ea!onal o"e".

e.

!A4A( EP(*/E+109

. 0E2*,* OF )2SU2L E0PLO10E*T.

The"e i! ca!%al employment he"e an employee i! engaged to pe"fo"m a 3ob& o"

o" !e"'ice hich i! me"ely incidental to the b%!ine!! of the employe"& and !%ch 3ob& o" o"

!e"'ice i! fo" a de5nite pe"iod made non to the employee at the time of engagement.110

(. SO0E PR,*),PLES O* )2SU2L E0PLO10E*T.

)a!%al employee become! "eg%la" afte" one yea" of !e"'ice by ope"ation of la.111

*o "eg%la" appointment pape"! nece!!a"y fo" ca!%al employee! to become "eg%la". 112

The one =1? yea" pe"iod !ho%ld be "econed f"om the hi"ing date.113

Repeated "ehi"ing of a ca!%al employee mae! him a "eg%la" employee.114

The age! and bene5t! of a ca!%al employee ho!e !tat%! i! con'e"ted into "eg%la"

employment !ho%ld not be dimini!hed.115

f.

F05E)-ER EP(*/E+116

. REU,S,TES FOR @2L,D,T1 OF F,;ED-TER0 )O*TR2)TS OF E0PLO10E*T.

The to =(? "e%i!ite! o" c"ite"ia fo" the 'alidity of a 5#ed-te"m cont"act of

employment a"e a! follo!<

1. The 5#ed pe"iod of employment a! noingly and 'ol%nta"ily ag"eed %pon by

the pa"tie!& itho%t any fo"ce& d%"e!! o" imp"ope" p"e!!%"e being b"o%ght to

bea" %pon the employee and ab!ent any othe" ci"c%m!tance! 'itiating hi!

con!ent; o"

(. ,t !ati!facto"ily appea"! that the employe" and employee dealt ith each othe" on

mo"e o" le!! e%al te"m! ith no mo"al dominance hate'e" being e#e"ci!ed by

the fo"me" on the latte".117

,f the fo"egoing c"ite"ia a"e not p"e!ent& the 5#ed-te"m cont"act of employment

!ho%ld be !t"%c don fo" being illegal.118

(. SO0E PR,*),PLES O* F,;ED-TER0 E0PLO10E*T.



























Fi#ed-te"m employment i! 'alid e'en if d%tie! a"e %!%ally nece!!a"y o" de!i"able in the

employe"$! %!%al b%!ine!! o" t"ade. 119

*otice of te"mination not nece!!a"y in 5#ed-te"m employment.120

Employee i! deemed "eg%la" if cont"act failed to !tate the !peci5c 5#ed pe"iod of

employment.121

)ha"ge! fo" mi!cond%ct o" othe" "ongf%l act! o" omi!!ion! a"e "ele'ant only in

te"mination p"io" to e#pi"ation of the te"m. They a"e not "ele'ant if te"mination i! d%e to

e#pi"ation of 5#ed pe"iod.122

Employee! alloed to o" beyond 5#ed te"m become "eg%la" employee!.123

Rende"ing o" beyond one =1? yea" o%ld "e!%lt to "eg%la" employment.124

S%cce!!i'e "eneal! of 5#ed-pe"iod cont"act! ill "e!%lt to "eg%la" employment.125

+i"ing of employee! on a %nifo"mly 5#ed A-month ba!i! and "eplacing them %pon the

e#pi"ation of thei" cont"act! ith othe" o"e"! ith the !ame employment !tat%!

ci"c%m'ent! thei" "ight to !ec%"ity of ten%"e.126

Employment on a 6day-to-day ba!i! fo" a tempo"a"y pe"iod7 ill "e!%lt to "eg%la"employment.127

Te"mination p"io" to lap!e of 5#ed-te"m cont"act !ho%ld be fo" a 3%!t o" a%tho"i4ed

ca%!e.128

Liability fo" illegal di!mi!!al of 5#ed-te"m employee i! only fo" !ala"y fo" %ne#pi"ed

po"tion.129

/. F,;ED-TER0 E0PLO10E*T OF OF:!.

OF:! can ne'e" ac%i"e "eg%la" employment.130

Employment cont"act! of OF:! fo" inde5nite pe"iod a"e not 'alid.131

OF:! do not become "eg%la" employee! by "ea!on of nat%"e of o".132

Se"ie! of "ehi"ing of OF:! cannot "ipen into "eg%la" employment. 133

)H2 cannot o'e""ide the te"m! and condition! p"e!c"ibed by the POE2 %nde" the

Standa"d Employment )ont"act =SE)? fo" OF:!.134

P"obationa"y employment of OF:! i! a mi!nome".135

The employment of OF:! fo" a 5#ed pe"iod i! not di!c"iminato"y.136

The cont"act! of OF:! cea!e %pon e#pi"ation the"eof .137

+i"ing of !eafa"e" fo" o'e"!ea! employment b%t a!!igning him to local 'e!!el doe! not

a8ect hi! !tat%! a! an OF:.138

Seafa"e" hi"ed fo" o'e"!ea! deployment b%t late" a!!igned to dome!tic ope"ation! after

the exiration of hi! o'e"!ea! cont"act cea!e! to be an OF:.139

#.$* !*+RA!0+3

. )O*TR2)T,* OUT OF SER@,)ES ,S 2 PROPR,ET2R1 R,+T OF E0PLO1ER

E;PRESSL1 2LLO:ED H1 L2:.

)ont"acting o%t of !e"'ice! i! not illegal er se. ,t i! an e#e"ci!e of b%!ine!! 3%dgment

o" management p"e"ogati'e. 2b!ent p"oof that the management acted in a malicio%! o"

a"bit"a"y manne"& the )o%"t ill not inte"fe"e ith the e#e"ci!e of 3%dgment by an

employe".140

(. OUTSOUR),*& 2 U*,@ERS2LL1 2))EPTED 02*2E0E*T PRERO2T,@E.






















































,t i! ithin the "ight of an employe" to ente" into an o%t!o%"cing a""angement a! an

e#e"ci!e of it! management p"e"ogati'e in o"de" to achie'e g"eate" economy and eJciency

in it! ope"ation! M a %ni'e"!ally accepted b%!ine!! ob3ecti'e and !tanda"d that can ne'e" be

%e!tioned. Thi! %ni'e"!al "ecognition of o%t!o%"cing a! a legitimate acti'ity ha! been

p"ono%nced in a n%mbe" of ca!e!.141 2 company can dete"mine in it! be!t 3%dgment

hethe" it !ho%ld cont"act o%t a pa"t of it! o" fo" a! long a! the employe" i! moti'ated bygood faith; the cont"acting i! not fo" p%"po!e! of ci"c%m'enting the la; and doe! not

in'ol'e o" be the "e!%lt of malicio%! o" a"bit"a"y action.142

/. OUTSOUR),* 021 HE DO*E RE2RDLESS OF :+ET+ER T+E 2)T,@,T1 ,S

PER,P+ER2L OR )ORE ,* *2TURE ,* REL2T,O* TO T+E E0PLO1ER$S HUS,*ESS.

Reite"ating it! ea"lie" p"ono%ncement in 2li'iado '. P"octe" N amble Phil!. &

,nc. &

143 the +igh )o%"t& in the (C1( ca!e of Digital Telecomm%nication! Philippine!& ,nc.

'. Digitel Employee! Union =DEU? &

144 !tated that indeed& it i! management p"e"ogati'e to

fa"m o%t any of it! acti'itie!& "ega"dle!! of hethe" !%ch acti'ity i! pe"iphe"al o" co"e in

nat%"e. +oe'e"& in o"de" fo" !%ch o%t!o%"cing to be 'alid& it m%!t be made to a legitimate

independent cont"acto" beca%!e the c%""ent labo" "%le! e#p"e!!ly p"ohibit labo"-onlycont"acting.

9. KUD,),2L RE)O*,T,O* OF @2L,D,T1 OF OUTSOUR),*.

The 'alidity of o%t!o%"cing ha! been 3%dicially "ecogni4ed by the S%p"eme )o%"t. ,t

ha! al"eady taen 3%dicial notice of the gene"al p"actice adopted in !e'e"al go'e"nment and

p"i'ate in!tit%tion! and ind%!t"ie!& of hi"ing independent cont"acto"! to pe"fo"m !pecial

!e"'ice!. The!e !e"'ice! "ange f"om 3anito"ial& !ec%"ity and e'en technical o" othe" !peci5c

!e"'ice!. :hile the!e !e"'ice! may be con!ide"ed di"ectly "elated to the p"incipal b%!ine!! of

the employe"& they a"e not nece!!a"y in the cond%ct of the p"incipal b%!ine!! of the

employe".145

a.AR0!(E 1%& * 1%' *F E (A*R !*)E

1. LABOR CODE PROVISIONS ON JOB-CONTRACTING OR

CONTRACTUALIZATION.

There are only four (4) provisions in the Labor Code which directly

enunciate the rules on contractualization, to wit:

1. rticle 1!" # Contractor or Subcontractor $146

%. rticle 1!& # Indirect Employer $147

'. rticle 1! # Posting of Bond$148 and

4. rticle 1! # Solidary Liability .149

These provisions will be discussed below, to*ether with the provisions of

other issuances.

b.)EPARE+ *R)ER +*. 1,-A

. T+E PRE@2,L,* ,0PLE0E*T,* RULES.

(eartment )rder 'o" *+-#, Series of **, *o'embe" 19& (C11 entitled “Rules.mlementing #rticles *! to */ of the 0abor Code, as #mended,” a! i!!%ed by the DOLE























Sec"eta"y to en%nciate "eg%lation! go'e"ning cont"acting and !%bcont"acting a""angement!.

Thi! i!!%ance !%pe"!eded (eartment )rder 'o" *+-, Series of Feb"%a"y (1&

(CC(& (eartment )rder 'o" 1, Series of * 0ay CB& (CC1and ea"lie" Depa"tment O"de"!

on the !ame !%b3ect matte".

(. PO:ER OF DOLE SE)RET2R1 TO RESTR,)T OR PRO+,H,T )O*TR2)T,*-OUT OF

L2HOR.

The 5"!t to =(? pa"ag"aph! of 2"ticle 1CI !et the gene"al "%le that a p"incipal i!

pe"mitted by la to engage the !e"'ice! of a cont"acto" fo" the pe"fo"mance of a pa"tic%la"

3ob& b%t the p"incipal& ne'e"thele!!& become! !olida"ily liable ith the cont"acto" fo" the

age! of the cont"acto"$! employee!. The thi"d =/"d? pa"ag"aph of 2"ticle 1CI& hoe'e"&

empoe"! the Sec"eta"y of Labo" to mae di!tinction! beteen pe"mi!!ible 3ob cont"acting

and “labor-only” cont"acting hich i! a p"ohibited act f%"the" de5ned %nde" the la!t

pa"ag"aph the"eof.150

Th%!& the DOLE Sec"eta"y may& by app"op"iate "eg%lation!& "e!t"ict o" p"ohibit the

cont"acting-o%t of labo" to p"otect the "ight! of o"e"! e!tabli!hed %nde" the Labo" )ode.

,n !o p"ohibiting o" "e!t"icting& he may mae app"op"iate di!tinction! beteen labo"-only

cont"acting and 3ob cont"acting a! ell a! di8e"entiation! ithin the!e type! of cont"acting

and dete"mine ho among the pa"tie! in'ol'ed !hall be con!ide"ed the employe" fo"

p%"po!e! of the )ode& to p"e'ent any 'iolation o" ci"c%m'ention of any p"o'i!ion the"eof.151

/. SPE),F,) E*U0ER2T,O* OF )O@ERED )O*TR2)TORS.

(eartment )rder 'o" *+-#, Series of ** applie! to<

1. 2ll pa"tie! of cont"acting and !%bcont"acting a""angement! he"e employe"-

employee "elation!hip! e#i!t; and

(. )oope"ati'e! engaging in cont"acting o" !%bcont"acting a""angement!.152

The p"o'i!ion! of thi! Depa"tment O"de" ill be di!c%!!ed 3ointly ith tho!e of 2"ticle! 1CI to 1CG of the Labo" )ode and tho!e of othe" i!!%ance! and piece! of

3%"i!p"%dence belo.

c.)EPARE+ !0R!4(AR +*. %1-12

. DEP2RT0E*T ),R)UL2R *O. C & SER,ES OF (C (& )L2R,F1,* DEP2RT0E*T

ORDER *O. B-2.

(eartment Circular 'o" *, Series of *, 0a"ch 1/& (C1(& a! i!!%ed 6)la"ifying

the 2pplicability of Depa"tment O"de" *o. 1B-2& Se"ie! of (C11 to H%!ine!! P"oce!!ing

O%t!o%"cing =HPO? >noledge P"oce!! O%t!o%"cing =PO? and the )on!t"%ction ,nd%!t"y.7

The p%"po!e of thi! )i"c%la" i! to "e!pond to %e"ie! on hethe" 5"m! o" companie!in the H%!ine!! P"oce!! O%t!o%"cing =HPO? o" noledge P"oce!! O%t!o%"cing =PO? and in

the )on!t"%ction ,nd%!t"y a"e co'e"ed by Depa"tment O"de" *o. 1B-2& Se"ie! of (C11.

1. On the applicability of D.O. B-2 to HPO& thi! )i"c%la" cla"i5e! a! follo!<

D.O. 1B-2& Se"ie! of (C11& clea"ly !pea! of a t"ilate"al "elation!hip that

cha"acte"i4e! the co'e"ed cont"acting>!%bcont"acting a""angement. Th%!& 'endo"-'endee

"elation!hip fo" enti"e b%!ine!! p"oce!!e! co'e"ed by the applicable p"o'i!ion! of the )i'il

)ode on )ont"act! i! e#cl%ded.153

D.O. 1B-2& Se"ie! of (C11& contemplate! gene"ic o" foc%!ed !ing%la" acti'ity in one

cont"act beteen the p"incipal and the cont"acto" =fo" e#ample& 3anito"ial& !ec%"ity&

me"chandi!ing& !peci5c p"od%ction o"? and doe! not contemplate info"mationtechnology-enabled !e"'ice! in'ol'ing an enti"e b%!ine!! p"oce!!e! =fo" e#ample& b%!ine!!












p"oce!! o%t!o%"cing& noledge p"oce!! o%t!o%"cing& legal p"oce!! o%t!o%"cing& ha"da"e

and>o" !ofta"e !%ppo"t& medical t"an!c"iption& animation !e"'ice!& bac oJce

ope"ation!>!%ppo"t? . The!e companie! engaged in b%!ine!! p"oce!!e! =QHPO!Q? may hi"e

employee! in acco"dance ith applicable la!& and maintain the!e employee! ba!ed on

b%!ine!! "e%i"ement!& hich may o" may not be fo" di8e"ent client! of the HPO! at

di8e"ent pe"iod! of the employee! employment.154

(. On the applicability of D.O. B-2 to the )on!t"%ction ,nd%!t"y and

)oo"dination ith P)2H-),2P& thi! )i"c%la" cla"i5e! a! follo!<

The licen!ing and the e#e"ci!e of "eg%lato"y poe"! o'e" the con!t"%ction ind%!t"y

a"e lodged ith the Philippine )ont"acto"! 2cc"editation Hoa"d =P)2H? & hich i! %nde" the

)on!t"%ction ,nd%!t"y 2%tho"ity of the Philippine! =)l2P? & p%"!%ant to the p"o'i!ion! of P.D.

*o. 19I& Se"ie! of 1GBC& and not ith the Depa"tment of Labo" and Employment o" any of

it! "egional oJce!. P)2H "egi!te"! all cont"acto"!& hethe" gene"al o" !%bcont"acto"!& in the

)on!t"%ction ,nd%!t"y and "eg%late! the !ame incl%ding en!%"ing compliance ith DOLE

Depa"tment O"de" *o. /& Se"ie! of GGB23uidelines 3o&erning the )ccuational Safety

and 4ealth in the Construction .ndustry5 6 and DOLE-DP:+-D,L-DT, and P)2H

0emo"and%m of 2g"eement-Koint 2dmini!t"ati'e O"de" *o. & Se"ie! of (C =on

coo"dination and ha"moni4ation of policie! and p"og"am! on occ%pational !afety and health

in the con!t"%ction ind%!t"y? .

Th%!& the DOLE& th"o%gh it! "egional oJce!& !hall not "e%i"e cont"acto"! licen!ed

by P)2H in the )on!t"%ction ,nd%!t"y to "egi!te" %nde" D.O. 1B-2& Se"ie! of (C11. 0o"eo'e"&

5nding! of 'iolation>! on labo" !tanda"d! and occ%pational health and !afety !tanda"d! !hall

be coo"dinated ith P)2H fo" it! app"op"iate action& incl%ding the po!!ible

cancellation>!%!pen!ion of the cont"acto"$! licen!e.155

d.

R0(AERA( RE(A0*+0P 0+ $* !*+RA!0+3156

" )O*TR2)T,* OR SUH)O*TR2)T,*.

7Contracting7 o" 7subcontracting7 "efe"! to an a""angement he"eby

a p"incipal ag"ee! to p%t o%t o" fa"m o%t ith a cont"acto" the pe"fo"mance o" completion of

a !peci5c 3ob& o" o" !e"'ice ithin a de5nite o" p"edete"mined pe"iod& "ega"dle!! of

hethe" !%ch 3ob& o" o" !e"'ice i! to be pe"fo"med o" completed ithin o" o%t!ide the

p"emi!e! of the p"incipal.157

(. TR,L2TER2L REL2T,O*S+,P& 0E2*,*.

78rilateral relationshi7 "efe"! to the "elation!hip in a cont"acting o" !%bcont"acting

a""angement he"e the"e i! a cont"act fo" a !peci5c 3ob& o" o" !e"'ice beteen

the p"incipal and the cont"acto"& and a cont"act of employment beteen the cont"acto" and

it! o"e"!.

The"e a"e th"ee =/? pa"tie! in'ol'ed in the!e a""angement!<

1. The p"incipal ho decide! to fa"m o%t a 3ob& o" o" !e"'ice to a cont"acto";

(. The cont"acto" ho ha! the capacity to independently %nde"tae the

pe"fo"mance of the 3ob& o" o" !e"'ice; and

/. The cont"act%al o"e"! engaged by the cont"acto" to accompli!h the 3ob& o"

o" !e"'ice.158

a. P"incipal.
















7Princial7 "efe"! to any employe"& hethe" a pe"!on o" entity& incl%ding go'e"nment

agencie! and go'e"nment-oned and cont"olled-co"po"ation!& ho>hich p%t! o%t o" fa"m!

o%t a 3ob& !e"'ice o" o" to a cont"acto". 159

Unde" 2"ticle 1C of the Labo" )ode& a “rincial” i! al!o "efe""ed to a! an “indirect

emloyer"” 2! de5ned the"ein& an “indirect emloyer” "efe"! to any pe"!on& pa"tne"!hip&

a!!ociation o" co"po"ation ho>hich cont"act! ith an independent cont"acto" fo" the

pe"fo"mance of any o"& 3ob& ta!& p"o3ect o" !e"'ice. The p"incipal the"efo"ei! not the di"ect

employe" of the o"e"! employed by the cont"acto" and a!!igned to the p"incipal.

:ithin the conte#t of a 'alid cont"acting a""angement& a “rincial” o" “indirect

emloyer” i! al!o non a! a “statutory emloyer” o" , !imply an“emloyer"” 160

b. )ont"acto".

7Contractor7 "efe"! to any pe"!on o" entity& incl%ding a coope"ati'e& engaged in a

legitimate cont"acting o" !%bcont"acting a""angement p"o'iding eithe" !e"'ice!& !illed

o"e"!& tempo"a"y o"e"!& o" a combination of !e"'ice! to a p"incipal %nde" a Se"'ice

2g"eement.

161

,n it! !t"ict technical !en!e& a “contractor” i! di8e"ent f"om a “subcontractor” in that

the fo"me" i! the one ho>hich di"ectly ente"! into a cont"act ith the p"incipal ith

"e!pect to the pe"fo"mance of a ce"tain o"& 3ob& ta!& p"o3ect o" !e"'ice; hile the latte"

me"ely !%bcont"act! the !aid o"& 3ob& ta!& p"o3ect o" !e"'ice f"om the cont"acto". Thi!

technical di!tinction i! e'ident f"om the lang%age of 2"ticle 1CI he"e mention of

the“subcontractor” a! made not in "elation to the employe" =o" p"incipal? b%t in "elation to

the “contractor"”

+oe'e"& thi! technical di!tinction beteen a “contractor” and a “subcontractor” i! not

gi'en any ma3o" !igni5cation a! both te"m! may be inte"changeably %!ed !ince in almo!t all

ca!e!& they "efe" to one and the !ame pe"!on o" entity.Th%!& the “contractor” o" “subcontractor” may app"op"iately "efe" to the pe"!on

him!elf o" entity it!elf& called an independent cont"acto"& ho>hich e#e"ci!e! independent

employment and ho>hich cont"act! to do a piece of o" acco"ding to hi!>it! on

method! and itho%t being !%b3ect of cont"ol by the p"incipal =o" indi"ect>!tat%to"y

employe"? & e#cept a! to the "e!%lt! the"eof. 162

The “contractor” o" “subcontractor” i! the “direct emloyer” of the cont"act%al o"e"!

o" employee! ho a"e !%pplied to the p"incipal and made to pe"fo"m the p"incipal$! =o"

indi"ect>!tat%to"y employe"$!? o"& 3ob& ta! o" p"o3ect.

c. )ont"act%al o"e" o" cont"acto"$! employee.

“Contractual wor%er” o" 7Contractor9s emloyee7 may "efe" to eithe"<

1. One employed by a cont"acto" to pe"fo"m o" complete a 3ob& o"& o" !e"'ice

p%"!%ant to a Se"'ice 2g"eement ith a p"incipal; o"

(. 2 "eg%la" employee of the cont"acto" ho!e f%nction! a"e not dependent on the

pe"fo"mance o" completion of a !peci5c 3ob& o" o" !e"'ice ithin a de5nite

pe"iod of time& i"e" & admini!t"ati'e !ta8 .163

/. T:O =(? ,*DS OF )O*TR2)TS ,* 2 TR,L2TER2L REL2T,O*S+,P.

,n the t"ilate"al "elation!hip& the"e a"e to =(? ind! of cont"act! that !ho%ld be

e#ec%ted& to it<

=a? Employment )ont"act beteen the cont"acto" and it! employee; and















=b? Se"'ice 2g"eement beteen the p"incipal and the cont"acto" 164 containing the

te"m! and condition! go'e"ning the pe"fo"mance o" completion of a !peci5c 3ob&

o" o" !e"'ice being fa"med o%t fo" a de5nite o" p"edete"mined pe"iod.165

o'e"ning la.

The :mloyment Contract i! go'e"ned by the Labo" )ode; hile the Ser&ice #greement i! go'e"ned by the )i'il )ode.166

9. E0PLO10E*T )O*TR2)T.

a. Employe"-employee "elation!hip beteen cont"acto" and it! employee!.

,n legitimate cont"acting o" !%bcont"acting a""angement& the"e e#i!t! an employe"-

employee "elation!hip beteen the cont"acto" and the employee! it engaged to pe"fo"m the

!peci5c 3ob& o" o" !e"'ice being cont"acted ith the p"incipal.167

Th%!& it i! e!!ential that a cont"act of employment be e#ec%ted beteen the

cont"acto" and the cont"act%al employee!. Thi! i! the rst cont"act "e%i"ed to be e#ec%ted

in a legitimate cont"acting a""angement.

b. )ontent! of the employment cont"act.

*otith!tanding any o"al o" "itten !tip%lation! to the cont"a"y& the employment

cont"act beteen the cont"acto" and it! employee !hall be go'e"ned by the p"o'i!ion! of

2"ticle! (G and (BC of the Labo" )ode& a! amended. ,t !hall incl%de the folloing te"m! and

condition!<

1. The !peci5c de!c"iption of the 3ob& o" o" !e"'ice to be pe"fo"med by the

employee;

(. The place of o" and te"m! and condition! of employment& incl%ding a !tatement

of the age "ate applicable to the indi'id%al employee; and

/. The te"m o" d%"ation of employment that m%!t be co-e#ten!i'e ith the Se"'ice

2g"eement o" ith the !peci5c pha!e of o" fo" hich the employee i!

engaged.168

c. D%ty of cont"acto" to info"m it! employee! abo%t the te"m! of the

employment cont"act.

The cont"acto" !hall info"m the employee of the fo"egoing te"m! and condition! of

employment in "iting on o" befo"e the 5"!t day of hi!>he" employment.169

A. SER@,)E 2REE0E*T.

a. The ag"eement i! beteen p"incipal and cont"acto".

2 second cont"act called “Ser&ice #greement” i! "e%i"ed to be e#ec%ted beteenthe p"incipal and the cont"acto" ho!e te"m! and condition! !hall go'e"n the cont"acting

a""angement beteen them.

b. )ontent! of the Se"'ice 2g"eement.

The Se"'ice 2g"eement !ho%ld embody the folloing<

1. The !peci5c de!c"iption of the 3ob& o" o" !e"'ice being !%bcont"acted;

(. The place of o" and te"m! and condition! go'e"ning the cont"acting

a""angement& to incl%de the ag"eed amo%nt of the !e"'ice! to be "ende"ed and

the !tanda"d admini!t"ati'e fee of not le!! than ten pe"cent =1C? of the total

cont"act co!t;


















/. P"o'i!ion! en!%"ing compliance ith all the "ight! and bene5t! of the employee!

%nde" the Labo" )ode and the ,mplementing R%le! =D.O. 1B-2& Se"ie! of (C11? on<

p"o'i!ion fo" !afe and healthf%l o"ing condition!; labo" !tanda"d! !%ch a!&

!e"'ice incenti'e lea'e& "e!t day!& o'e"time pay& 1/ th month pay and !epa"ation

pay; "eti"ement bene5t!; cont"ib%tion! and "emittance of SSS& Philhealth& Pag-,H,

F%nd& and othe" elfa"e bene5t!; the "ight to !elf-o"gani4ation& collecti'eba"gaining and peacef%l conce"ted action; and the "ight to !ec%"ity of ten%"e;

9. 2 p"o'i!ion on the *et Financial )ont"acting )apacity of the cont"acto"& hich

m%!t be e%al to the total cont"act co!t;

A. 2 p"o'i!ion on the i!!%ance of the bond>! "eneable e'e"y yea";

I. The cont"acto" o" !%bcont"acto" !hall di"ectly "emit monthly the employe"! !ha"e

and employee! cont"ib%tion to the SSS& E))& Philhealth and Pag-,H,; and

. The te"m o" d%"ation of engagement.170

c. *et Financial )ont"acting )apacity =*F))? & meaning.

The te"m Q*et Financial )ont"acting )apacity =*F))? Q mentioned in the Ser&ice

#greement abo'e "efe"! to the fo"m%la to dete"mine the 5nancial capacity of the cont"acto"

to ca""y o%t the 3ob& o" o" !e"'ice! !o%ght to be %nde"taen %nde" a Se"'ice 2g"eement.

*F)) i! c%""ent a!!et! min%! c%""ent liabilitie! m%ltiplied by & hich !tand! fo" cont"act

d%"ation e%i'alent to< 1C fo" one yea" o" le!!; 1A fo" mo"e than one =1? yea" %p to to =(?

yea"!; and (C fo" mo"e than to =(? yea"!& min%! the 'al%e of all o%t!tanding o" ongoing

p"o3ect! incl%ding cont"act! to be !ta"ted.171

*F)) i! the fo"m%la !et o%t in the ,mplementing R%le! and Reg%lation! of R.2. *o.

G1B9& app"o'ed Kan%a"y 1C& (CC/ o" 62n 2ct P"o'iding fo" the 0ode"ni4ation&

Standa"di4ation and Reg%lation of the P"oc%"ement 2cti'itie! of the o'e"nment and Fo"

Othe" P%"po!e!.7

d. E8ect of 'iolation of any of the cont"act! afo"ementioned.

2 5nding by competent a%tho"ity of 'iolation of any of the cont"act! mentioned

abo'e =Employment )ont"act and Se"'ice 2g"eement? !hall "ende" the p"incipal the di"ect

employe" of the employee! of the cont"acto" o" !%bcont"acto"& p%"!%ant to 2"ticle 1CG of

the Labo" )ode& a! amended.172

e. D%ty to p"od%ce copy of cont"act beteen the p"incipal and the

cont"acto".

The p"incipal o" the cont"acto" !hall be %nde" the obligation to p"od%ce a copy of

the Se"'ice 2g"eement in the o"dina"y co%"!e of in!pection by the DOLE.

The cont"acto" !hall liei!e be %nde" the obligation to p"od%ce a copy of any )ont"act of

Employment hen di"ected to do !o by the DOLE Regional Di"ecto" o" hi!>he" a%tho"i4ed

"ep"e!entati'e.173

e.

EFFE! *F (A*R-*+(/ !*+RA!0+3174

. LE,T,02TE KOH )O*TR2)T,* 2RR2*E0E*T.

,t bea"! noting that the Labo" )ode doe! not de5ne hat con!tit%te! a legitimate

3ob cont"acting a""angement. +oe'e"& %nde" (eartment )rder 'o" *+-#175 and

3%"i!p"%dence& 3ob cont"acting !hall be legitimate if all of the folloing ci"c%m!tance!

conc%"<=1? The cont"acto" m%!t be d%ly "egi!te"ed ith the DOLE.



















=(? The cont"acto" ca""ie! a di!tinct and independent b%!ine!! and %nde"tae!

to pe"fo"m the 3ob& o" o" !e"'ice on it! on "e!pon!ibility& acco"ding to

it! on manne" and method& and f"ee f"om cont"ol and di"ection of the

p"incipal in all matte"! connected ith the pe"fo"mance of the

o" excet a! to the "e!%lt! the"eof;

=/? The cont"acto" ha! !%b!tantial capital and>o" in'e!tment in the fo"m of

tool!& e%ipment& machine"ie!& o" p"emi!e!& and othe" mate"ial! hich a"e

nece!!a"y in the cond%ct of the b%!ine!!;176 and

=9? The Se"'ice 2g"eement beteen p"incipal and cont"acto" !ho%ld en!%"e

compliance ith all the "ight! and bene5t! of o"e"! %nde" Labo"

La!177 !%ch a! labo" and occ%pational !afety and health !tanda"d!& f"ee

e#e"ci!e of the "ight to !elf-o"gani4ation& !ec%"ity of ten%"e& and !ocial and

elfa"e bene5t!.178

2b!ence of any of the fo"egoing "e%i!ite! mae! it a labo"-only cont"acting

a""angement.179

(. ,0PORT2*T PO,*TS O* T+E 2HO@E REU,S,TES.

=a? On *o. Re%i!ite abo'e. - Regi!t"ation of cont"acto" ith the DOLE i! no

mandato"ily "e%i"ed. Fail%"e to "egi!te" !hall gi'e "i!e to the resumtion that the cont"acto"

i! engaged in labor-only contracting .180

=b? On *o. ( Re%i!ite abo'e. - Thi! i! the “Right of Control” te!t hich ba!ically

add"e!!e! the i!!%e of hethe" the cont"acto"$! manne" and method! of pe"fo"ming hi! 3ob

cont"acting i! completely f"ee f"om the cont"ol and di"ection of the p"incipal excet a! to

the "e!%lt! the"eof. ,f the i!!%e i! an!e"ed in the aJ"mati'e& then thi! "e%i!ite of

legitimate 3ob cont"acting a""angement i! f%lly !ati!5ed.

,ll%!t"ati'e ca!e!<

,n the (C1( ca!e of Digital Telecomm%nication! Philippine!& ,nc. '. Digitel

Employee! Union =DEU? &

181 be!ide! the lac of !%b!tantial capitali4ation that

indicate! labo"-only cont"acting& it a! f%"the" held that Digitel Se"'ice& ,nc.

=Digi!e"'? & a non-p"o5t ente"p"i!e engaged in call cente" !e"'icing& a! a labo"-only

cont"acto" of petitione" Digitel beca%!e it doe! not e#e"ci!e cont"ol o'e" the

a8ected employee!. The *LR) highlighted the fact that Digi!e"' !ha"ed the !ame

+%man Re!o%"ce!& 2cco%nting& 2%dit and Legal Depa"tment! ith Digitel hich

manife!ted that it a! Digitel ho e#e"ci!ed cont"ol o'e" the pe"fo"mance of the

a8ected employee!. The *LR) al!o "elied on the lette"! of commendation& pla%e!

of app"eciation and ce"ti5cation i!!%ed by Digitel to the )%!tome" Se"'ice

Rep"e!entati'e! a! e'idence of cont"ol.

The !ame "%ling of lac of cont"ol by the cont"acto" a! cited a! additional

3%!ti5cation fo" decla"ing the cont"acto" a! a labo"-only cont"acto" in the (C1(

ca!e of *o"i! T"ading )o"po"ation '. H%ena'i!ta.

182 Th%!& togethe" ith the

DOLE Regional Di"ecto"$! 5nding thatPanaghiusa sa ;auswagan <ulti-Purose

Cooerati&e =P2S22? & a d%ly-"egi!te"ed coope"ati'e& e'idently laced !%b!tantial

capital o" in'e!tment "e%i"ed of legitimate 3ob cont"acto"!& the coope"ati'e failed

to di!p%te the "e!pondent!$ allegation that oJce"! of *o"i! T"ading !%pe"'i!ed

the o" and paid the !ala"ie! of it! employee!.

=c? On *o. / Re%i!ite abo'e. - Thi! i! the “Substantial Caital or .n&estment” te!t

hich !ee! to add"e!! the i!!%e of hethe" the cont"acto" ha! !%b!tantial capital o"in'e!tment in the fo"m of tool!& e%ipment& machine"ie!& o" p"emi!e!& and othe" mate"ial!



















hich a"e nece!!a"y in the cond%ct of it! b%!ine!!. 183 ,f the an!e" i! in the aJ"mati'e& the

!econd "e%i!ite in legitimate 3ob cont"acting>!%bcont"acting a""angement i! f%lly complied

ith.

Signi5cant point!<

he amo%nt of !%b!tantial capital i! no 5#ed %nde" the

R%le!. Unde" (eartment )rder 'o" *+-#, the te"m 7substantial caital7 !hall no

mean<

1. ,n the ca!e of co"po"ation!& pa"tne"!hip! o" coope"ati'e!M paid-%p capital

!toc!>!ha"e! of at lea!t Th"ee 0illion Pe!o! =P/&CCC&CCC.CC? ; o"

(. ,n the ca!e of !ingle p"op"ieto"!hip - a net o"th of at lea!t Th"ee 0illion

Pe!o! =P/&CCC&CCC.CC? . 184

Unlie in the pa!t implementing "%le!& (eartment )rder 'o" *+-# no !et! in

'e"y clea" te"m!& the amo%nt hich con!tit%te! 6!%b!tantial capital. 7

0o"eo'e"& coope"ati'e! a"e no mentioned p"ominently in the en%me"ation

of the entitie! hich may engage in cont"acting>!%bcont"acting a""angement.

Hy clea"ly !pecifying the amo%nt that con!tit%te! 6!%b!tantial capital&7 ca!e! in

the pa!t he"e thi! i!!%e a! "ai!ed !ho%ld no be %ali5ed by thi! ne

i!!%ance. )a!e! !%b!e%ent to the e8ecti'ity of (eartment )rder 'o" *+-# on

*o'embe" 19& (C11 !ho%ld tae thi! !peci5c amo%nt! into acco%nt.

S%b!tantial capital7 and 6in'e!tment in tool!& etc. 7 a"e to !epa"ate

"e%i"ement!.

“Substantial caital” and “in&estment in tools, e=uiment, imlements, machineries and

wor% remises” !ho%ld be t"eated a! to =(? di!tinct and !epa"ate "e%i"ement! in

dete"mining hethe" the"e i! legitimate 3ob cont"acting a""angement.185

=d? On *o. 9 Re%i!ite abo'e. - Thi! i! the “0egal Rights and >enets Comliance” te!thich add"e!!e! the i!!%e of hethe" the Se"'ice 2g"eement beteen the p"incipal and

cont"acto" i! compliant ith the "ight! and bene5t! of o"e"! %nde" labo" la!.186 ,f

an!e"ed in theaJ"mati'e& the cont"acting a""angement i! deemed legitimate.

Right! of cont"acto"!$ employee!. - Pe" (eartment )rder 'o" *+-#, all

cont"acto"! employee!& hethe" deployed o" a!!igned a! "elie'e"& !ea!onal& ee-

ende"& tempo"a"y& o" p"omo 3obbe"!& !hall be entitled to all the "ight! and

p"i'ilege! a! p"o'ided fo" in the Labo" )ode& a! amended& to incl%de the folloing<

=a? Safe and healthf%l o"ing condition!;

=b? Labo" !tanda"d! !%ch a! b%t not limited to !e"'ice incenti'e lea'e& "e!t day!&

o'e"time pay& holiday pay& 1/th

month pay& and !epa"ation pay a! may bep"o'ided in the Se"'ice 2g"eement o" %nde" the Labo" )ode;

=c? Reti"ement bene5t! %nde" the SSS o" "eti"ement plan! of the cont"acto"& if

the"e i! any;

=d? Social !ec%"ity and elfa"e bene5t!;

=e? Self-o"gani4ation& collecti'e ba"gaining and peacef%l conce"ted acti'itie!; and

=f? Sec%"ity of ten%"e.187

8ect of 'iolation of the "ight! of cont"acto"$! employee!. - 2 5nding by

competent a%tho"ity of 'iolation of the !aid "ight! of cont"acto"$! employee! !hall

"ende" the p"incipal the di"ect employe" of the employee! of the cont"acto" o"

!%bcont"acto"& p%"!%ant to 2"ticle 1CG of the Labo" )ode& a! amended.188

/. L2HOR-O*L1 )O*TR2)T,*.
















a. 2b!ol%te p"ohibition.

Labo"-only cont"acting i! e#p"e!!ly p"ohibited %nde" 2"ticle 1CI of the Labo"

)ode189 and it! implementing "%le!.190

b. Labo"-only cont"acting pe" Depa"tment O"de" *o. B-2& Se"ie! of (C .

Pe" la&191 thi! Depa"tment O"de"192 and pe"tinent 3%"i!p"%dence&193 labo"-onlycont"acting "efe"! to an a""angement he"e<

=a? The cont"acto" doe! not ha'e !%b!tantial capital o" in'e!tment! in the fo"m of

tool!& e%ipment& machine"ie!& o" p"emi!e!& among othe"!& and the

employee! "ec"%ited and placed a"e pe"fo"ming acti'itie! hich a"e %!%ally

nece!!a"y o" de!i"able to the ope"ation of the company& o" di"ectly "elated

to the main b%!ine!! of the p"incipal ithin a de5nite o" p"edete"mined

pe"iod&"ega"dle!! of hethe" !%ch 3ob& o" o" !e"'ice i! to be pe"fo"med o"

completed ithin o" o%t!ide the p"emi!e! of the p"incipal; )R

=b? The cont"acto" doe! not e#e"ci!e the "ight of cont"ol o'e" the pe"fo"mance of

the o" of the employee.

c. Some impo"tant point! on the fo"egoing "e%i!ite!<

1? E'en if only one of the to =(? element! abo'e i! p"e!ent& the"e i! labo"-only

cont"acting.194

(? The “(irect Relation to Princial?s >usiness” te!t en%nciated abo'e !ee! to

add"e!! the i!!%e of hethe" the employee! "ec"%ited& !%pplied o" placed by a

cont"acto" to the p"incipal a"e pe"fo"ming acti'itie! hich a"e di"ectly "elated

to the main b%!ine!! of the p"incipal. ,f thi! po!e" i! an!e"ed in

the aJ"mati'e& the cont"acto" i! deemed a labo"-only cont"acto" and the

employee! become di"ect employee! of the p"incipal.

I!"#$%#&'( )%"("*

+n the %!1% case of N+$,&" T$%&/ C+$+$%#&+ '.

B!(%'&"#%195 it was established that Panaghiusa sa Kauswagan

Multi-Purpose Cooperatie(-) , a duly/re*istered cooperative,

was a labor/only contractor because, besides its lac0 of substantial

capital or investent in tools and its failure to carry on an

independent contractin* business, the respondent/wor0ers it

supplied to petitioner/eployer, were perforin* activities directly

related to the principal business of the petitioner.

+n the %!! case of C+)%-C+% B+##($" P&". I). '.

A/&#+196 the contractor was declared a labor/only contractor

because the respondent/wor0ers supplied by it to petitioner

copany wor0ed therein as salesen. +n the 2elivery *reeent

between petitioner and the contractor, it is stated that petitioner is

en*a*ed in the anufacture, distribution and sale of softdrin0s and

other related products. The wor0 of respondents, constitutin*

distribution and sale of Coca/Cola products, is clearly indispensable

to the principal business of petitioner.

























/? The 'alidity of 3ob cont"acting a""angement doe! not depend on hethe" the

3ob& o"& o" !e"'ice i! done ithin o" o%t!ide the company p"emi!e! of the

p"incipal.197

H%t in the (C1C ca!e of Haba! '. Lo"en4o Shipping )o"p. &

198 the +igh )o%"t

cited a! additional ba!i! fo" holding that the cont"acto"& He!t 0anpoe"

Se"'ice!& ,nc. =H0S,? & a! a labo"-only cont"acto"& the fact that petitione"!

o"ed at "e!pondent LS)$! p"emi!e!& and nohe"e el!e. Othe" than the

p"o'i!ion! of the #greement beteen "e!pondent LS) and H0S,& the"e a! no

!hoing that it a! H0S, hich e!tabli!hed petitione"!$ o"ing p"oced%"e

and method!& hich !%pe"'i!ed petitione"! in thei" o"& o" hich e'al%ated

the !ame. The"e a! ab!ol%te lac of e'idence that H0S, e#e"ci!ed cont"ol

o'e" them o" thei" o"& e#cept fo" the fact that petitione"! e"e hi"ed by

H0S,.

9. EFFE)TS OF L2HOR-O*L1 )O*TR2)T,*.

199

,n !%mma"y& the folloing a"e the e8ect! of a labo"-only cont"acting a""angement<

1. The labo"-only cont"acto" ill be t"eated a! the agent o" inte"media"y of the

p"incipal. Since the act of an agent i! the act of the p"incipal& "ep"e!entation!

made by the labo"-only cont"acto" to the employee! ill bind the p"incipal.

(. The p"incipal ill become the employe" a! if it di"ectly employed the o"e"!

!%pplied by the labo"-only cont"acto" to %nde"tae the !%bcont"acted 3ob o"

!e"'ice. ,t ill be "e!pon!ible to them fo" all thei" entitlement! and bene5t! %nde"

labo" la!.

/. The p"incipal and the labo"-only cont"acto" ill be !olida"ily t"eated a! the di"ect

employe".

9. The employee! ill become employee! of the p"incipal& !%b3ect to thecla!!i5cation! of employee! %nde" 2"ticle (BC of the Labo" )ode.200

A. LE,T,02TE KOH )O*TR2)T,* @S. L2HOR-O*L1 )O*TR2)T,*.

The chief di!tinction! beteen legitimate 3ob cont"acting& on the one hand& and the

p"ohibited labo"-only cont"acting& on the othe"& may be !%mmed %p a! follo!<

1. ,n the former & no employe"-employee "elation!hip e#i!t! beteen the cont"act%al

employee! of the 3ob cont"acto" and the p"incipal; hile in the latter & an

employe"-employee "elation!hip i! c"eated by la beteen the p"incipal and the

cont"act%al employee! !%pplied by the labo"-only cont"acto".201

(. ,n the former & the p"incipal i! con!ide"ed only an “indirect emloyer,” a! thi! te"m i!%nde"!tood %nde" 2"ticle 1C of the Labo" )ode; hile in the latter & the p"incipal

i! con!ide"ed the “direct emloyer” of the cont"act%al employee! in acco"dance

ith the la!t pa"ag"aph of 2"ticle 1CI of the Labo" )ode. 202

/. ,n the former & the 3oint and !e'e"al obligation of the p"incipal and the legitimate

3ob cont"acto" i! only fo" a limited p%"po!e& that i!& to en!%"e that the employee!

a"e paid thei" age!. Othe" than thi! obligation of paying the age!& the p"incipal

i! not "e!pon!ible fo" any claim made by the cont"act%al employee!; hile in

the latter & the p"incipal become! 3ointly and !e'e"ally o" !olida"ily liable ith the

labo"-only cont"acto" to the latte"$! employee! in the !ame manne" and e#tent

that the p"incipal i! liable to employee! di"ectly hi"ed by him>he"& a! p"o'ided in

2"ticle 1CI of the Labo" )ode& a! amended.203



















9. ,n the former & the legitimate 3ob cont"acto" %nde"tae! to pe"fo"m a !peci5c 3ob

fo" the p"incipal; hile in the latter & the labo"-only cont"acto" me"ely p"o'ide!&

!%pplie!& "ec"%it! and place! the pe"!onnel to o" fo" the p"incipal.204

I. PRO+,H,T,O*S OT+ER T+2* L2HOR-O*L1 )O*TR2)T,*.

a. To =(? !et! of othe" p"ohibition!.

*otith!tanding the p"ohibition on labo"-only cont"acting& the folloing a"e decla"ed

p"ohibited fo" being cont"a"y to la o" p%blic policy %nde" (eartment )rder 'o" *+-#, Series

of **<

2. )ont"acting o%t of 3ob!& o"! o" !e"'ice! hen not done in good faith and

not 3%!ti5ed by the e#igencie! of the b%!ine!! !%ch a! the folloing<

=1? )ont"acting o%t of 3ob!& o"! o" !e"'ice! hen the !ame "e!%lt! in the

te"mination o" "ed%ction of "eg%la" employee! and "ed%ction of o" ho%"!

o" "ed%ction o" !plitting of the ba"gaining %nit.

=(? )ont"acting o%t of o" ith a Q)abo.Q

=/? Taing %nd%e ad'antage of the economic !it%ation o" lac of ba"gaining

!t"ength of the cont"acto"! employee!& o" %nde"mining thei" !ec%"ity of

ten%"e o" ba!ic "ight!& o" ci"c%m'enting the p"o'i!ion! of "eg%la"

employment& in any of the folloing in!tance!<

=i? Re%i"ing them to pe"fo"m f%nction! hich a"e c%""ently being pe"fo"med

by the "eg%la" employee! of the p"incipal; and

=ii? Re%i"ing them to !ign& a! a p"econdition to employment o" contin%ed

employment& an antedated "e!ignation lette"; a blan pay"oll; a ai'e" of

labo" !tanda"d! incl%ding minim%m age! and !ocial o" elfa"e bene5t!;

o" a %itclaim "elea!ing the p"incipal& cont"acto" o" f"om any liability a! to

payment of f%t%"e claim!.

=9? )ont"acting o%t of a 3ob& o" o" !e"'ice th"o%gh an in-ho%!e agency.

=A? )ont"acting o%t of a 3ob& o" o" !e"'ice that i! nece!!a"y o" de!i"able o"

di"ectly "elated to the b%!ine!! o" ope"ation of the p"incipal by "ea!on of a

!t"ie o" loco%t hethe" act%al o" imminent.

=I? )ont"acting o%t of a 3ob& o" o" !e"'ice being pe"fo"med by %nion membe"!

hen !%ch ill inte"fe"e ith& "e!t"ain o" coe"ce employee! in the e#e"ci!e of

thei" "ight! to !elf-o"gani4ation a! p"o'ided in 2"t. (9B =c? of the Labo" )ode&

a! amended.

=? Repeated hi"ing of employee! %nde" an employment cont"act of !ho"td%"ation o" %nde" a Se"'ice 2g"eement of !ho"t d%"ation ith the !ame o"

di8e"ent cont"acto"!& hich ci"c%m'ent! the Labo" )ode p"o'i!ion! on

Sec%"ity of Ten%"e.

=B? Re%i"ing employee! %nde" a !%bcont"acting a""angement to !ign a cont"act

5#ing the pe"iod of employment to a te"m !ho"te" than the te"m of the

Se"'ice 2g"eement& %nle!! the cont"act i! di'i!ible into pha!e! fo" hich

!%b!tantially di8e"ent !ill! a"e "e%i"ed and thi! i! made non to the

employee at the time of engagement.

=G? Ref%!al to p"o'ide a copy of the Se"'ice 2g"eement and the employment

cont"act! beteen the cont"acto" and the employee! deployed to o" in the

ba"gaining %nit of the p"incipal! ce"ti5ed ba"gaining agent to the !ole and

e#cl%!i'e ba"gaining agent =SEH2? .





=1C? Engaging o" maintaining by the p"incipal of !%bcont"acted employee! in

e#ce!! of tho!e p"o'ided fo" in the applicable )ollecti'e Ha"gaining

2g"eement =)H2? o" a! !et by the ,nd%!t"y T"ipa"tite )o%ncil =,T)? .

H. )ont"acting o%t of 3ob!& o"! o" !e"'ice! analogo%! to the abo'e hen

not done in good faith and not 3%!ti5ed by the e#igencie! of the

b%!ine!!.

205

b. )abo& meaning.

7Cabo7 "efe"! to a pe"!on o" g"o%p of pe"!on! o" to a labo" g"o%p hich& in the

g%i!e of a labo" o"gani4ation& coope"ati'e o" any entity& !%pplie! o"e"! to an employe"&

ith o" itho%t any moneta"y o" othe" con!ide"ation& hethe" in the capacity of an agent of

the employe" o" a! an o!ten!ible independent cont"acto". 206

c. ,n-ho%!e agency& meaning.

7.n-house agency7 "efe"! to a cont"acto" hich i! oned& managed& o" cont"olled

di"ectly o" indi"ectly by the p"incipal o" one he"e the p"incipal on!>"ep"e!ent! any !ha"e

of !toc& and hich ope"ate! !olely o" mainly fo" the p"incipal.207

d. E8ect of commi!!ion of p"ohibited acti'itie!.

2 5nding by competent a%tho"ity of commi!!ion of any of the abo'e

en%me"ated p"ohibited acti'itie! !hall "ende" the p"incipal the di"ect employe" of the

employee! of the cont"acto" o" !%bcont"acto"& p%"!%ant to 2"ticle 1CG of the Labo" )ode&

a! amended.208

------------oOo------------

Chapter Four


OPICS PER SYLLABUS

. )ismissal from employment

1. $ust !auses2. Authori6ed !auses#. )ue Process

a7 8in-notice re9uirementb7 earing: meaning of opportunity to be heard

.

)00A( FR* EP(*/E+

. T:O-FOLD DUE PRO)ESS REU,RE0E*T.

1

Di!mi!!al of employee! "e%i"e! the ob!e"'ance of the to-fold d%e p"oce!!

"e%i!ite!& namely<

1. Substanti&e a!pect hich mean! that the di!mi!!al m%!t be fo" any of the =1? 3%!t

ca%!e! p"o'ided %nde" 2"ticle (B( of the Labo" )ode o" the company "%le! and

"eg%lation! p"om%lgated by the employe"; o" =(? a%tho"i4ed ca%!e! %nde"

2"ticle! (B/ and (B9 the"eof; and






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(. Procedural a!pect hich mean! that the employee m%!t be acco"ded d%e

p"oce!!& the element! of hich a"e notice and the oppo"t%nity to be hea"d and to

defend him!elf.2

(. KUST )2USES @S. 2UT+OR,ED )2USES.

2 di!mi!!al ba!ed on a just cause mean! that the employee ha! committed a"ongf%l act o" omi!!ion; hile a di!mi!!al ba!ed on anauthori@ed cause mean! that the"e

e#i!t! a g"o%nd hich the la it!elf allo! o" a%tho"i4e! to be in'oed to 3%!tify the

te"mination of an employee e'en if he ha! not committed any "ongf%l act o" omi!!ion !%ch

a! in!tallation of labo"-!a'ing de'ice!& "ed%ndancy& "et"enchment& clo!%"e o" ce!!ation of

b%!ine!! ope"ation!3 o" di!ea!e.4

1.

$4 !A4E

. KUST )2USES U*DER T+E L2HOR )ODE.

The 3ust causes in the Labor Code are found in the followin* provisionsthereof:

(1) A$#&)( 282 - (Terination by the ployer) which provides for the

followin* *rounds:

=a? Se"io%! mi!cond%ct o" illf%l di!obedience by the employee of the laf%l

o"de"! of hi! employe" o" "ep"e!entati'e in connection ith hi! o";

=b? "o!! and habit%al neglect by the employee of hi! d%tie!;

=c? F"a%d o" illf%l b"each by the employee of the t"%!t "epo!ed in him by hi!

employe" o" d%ly a%tho"i4ed "ep"e!entati'e;

=d? )ommi!!ion of a c"ime o" o8en!e by the employee again!t the pe"!on of hi!

employe" o" any immediate membe" of hi! family o" hi! d%ly a%tho"i4ed

"ep"e!entati'e!; and

=e? Othe" ca%!e! analogo%! to the fo"egoing.

(%) A$#&)( 264% / (rohibited ctivities) which provides for the

terination of the followin*:

=a? Union oJce"! ho noingly pa"ticipate in an illegal !t"ie and the"efo"e

deemed to ha'e lo!t thei" employment !tat%!.

=b? 2ny employee& %nion oJce" o" o"dina"y membe" ho noingly pa"ticipate!in the commi!!ion of illegal act! d%"ing a !t"ie =i""e!pecti'e of hethe" the

!t"ie i! legal o" illegal? & i! al!o deemed to ha'e lo!t hi! employment !tat%!.

=/? 2"ticle (I/=g? - =*ational ,nte"e!t )a!e!? he"e !t"ie"! ho 'iolate o"de"!&

p"ohibition! and>o" in3%nction! a! a"e i!!%ed by the DOLE Sec"eta"y o" the *LR)&

may be impo!ed immediate di!ciplina"y action& incl%ding di!mi!!al o" lo!! of

employment !tat%!.5

=9? 2"ticle (9B=e? - =Union Sec%"ity )la%!e? he"e 'iolation of the %nion !ec%"ity

ag"eement in the )H2 may "e!%lt in te"mination of employment. Unde" thi!

cla%!e& the ba"gaining %nion can demand f"om the employe" the di!mi!!al of an

employee ho commit! a b"each of %nion !ec%"ity a""angement& !%ch a! fail%"eto 3oin the %nion o" to maintain hi! membe"!hip in good !tanding the"ein. The














!ame %nion can al!o demand the di!mi!!al of a membe" ho commit! an act of

di!loyalty again!t it& !%ch a! hen the membe" o"gani4e! a "i'al %nion.6

(. KUST )2USES ,* 2))ORD2*)E :,T+ PRE@2,L,* KUR,SPRUDE*)E.

,n addition to the 3%!t ca%!e! mentioned in the Labo" )ode& 3%!t ca%!e! a"e al!o

fo%nd in p"e'ailing 3%"i!p"%dence.7

The folloing may be cited a! 3%!t ca%!e! in acco"danceith p"e'ailing 3%"i!p"%dence<

1. @iolation of company "%le! and "eg%lation!.8

(. Theft of p"ope"ty oned by a co-employee

9 a! di!ting%i!hed f"om comany-

owned roerty hich i! con!ide"ed !e"io%! mi!cond%ct.

/. ,ncompetence& ineJciency o" ineptit%de.10

9. Fail%"e to attain o" %ota.11

A. Fail%"e to comply ith eight !tanda"d! of employe".12

I. 2ttit%de p"oblem.13

/. D,S0,SS2L H2SED O* )O0P2*1 RULES 2*D REUL2T,O*S *OT ,LLE2L.

+f the *round cited is based on the Copany 5ules and 5e*ulations or Code

of Conduct or Code of 2iscipline, it is to be e6pected that the sae is not to be

found in rticle %% of the Labor Code since the latter erely enuerates the 3ust

causes or *rounds in *eneral ters.

,n the (C1/ ca!e of Sampag%ita 2%to T"an!po"t )o"po"ation '. *LR)&

14 the

S%p"eme )o%"t p"ono%nced that the )o%"t of 2ppeal! e""ed in "%ling that the di!mi!!al of

p"i'ate "e!pondent& a b%! d"i'e" of petitione"& a! illegal beca%!e the 6g"o%nd! %pon hich

petitione"! ba!ed "e!pondent$! te"mination f"om employment& &i@< hindi lahat ng schedule

nailalabas,?ABmababa ang re&enue ng bus, laging %asama anAg asawa sa byahe? and Bmaraming

naririnig na %wento tung%ol sa %anya, nag-uutos ng conductor ara %umita sa hindi magandang

araan&$ ### a"e not among tho!een%me"ated %nde" 2"ticle (B( of the Labo" )ode a! 3%!tca%!e! fo" te"mination of employment. 7 The i""eg%la"itie! o" inf"action! committed by

p"i'ate "e!pondent in connection ith hi! o" a! a b%! d"i'e" con!tit%te !e"io%!

mi!cond%ct o"& at the 'e"y lea!t& cond%ct analogo%! to !e"io%! mi!cond%ct& %nde" the abo'e-

cited 2"ticle (B( of the Labo" )ode. The "e%i"ement in the company "%le! that< /. to obey

t"aJc "%le! and "eg%lation! a! ell a! the company policie!. 9. to en!%"e the !afety

of the "iding p%blic a! ell a! the othe" 'ehicle! and moto"i!t =!ic? $ i! !o f%ndamental

and !o %ni'e"!al that any b%! d"i'e" i! e#pected to !ati!fy the "e%i"ement hethe" o" not

he ha! been !o info"med.

9. D,S)USS,O* OF T+E KUST )2USES U*DER 2RT,)LE (B( OF T+E L2HOR )ODE.

The g"o%nd! mentioned in 2"ticle (B( !hall be di!c%!!ed he"ein seriatim"

,.

SER,OUS 0,S)O*DU)T

15

1. REUISITES.

Fo" mi!cond%ct o" imp"ope" beha'io" to be a 3%!t ca%!e fo" di!mi!!al& the folloing

"e%i!ite! m%!t conc%"<

1. ,t m%!t be !e"io%!; and

(. ,t m%!t "elate to the pe"fo"mance of the employee$! d%tie!; and

/. ,t m%!t !ho that he ha! become %n5t to contin%e o"ing fo" the employe".16































2ll the abo'e th"ee =/? "e%i!ite! m%!t conc%".17

(. SO0E PR,*),PLES O* SER,OUS 0,S)O*DU)T.

V Se"io%! mi!cond%ct implie! that it m%!t be of !%ch g"a'e and agg"a'ated

cha"acte" and not me"ely t"i'ial o" %nimpo"tant.18

V Simple o" mino" mi!cond%ct o%ld not 3%!tify the te"mination of the !e"'ice! of anemployee.19

V The cha"ge fo" !e"io%! mi!cond%ct m%!t not be a me"e afte"tho%ght.20

V Se"ie! of i""eg%la"itie!& hen p%t togethe"& may con!tit%te !e"io%! mi!cond%ct.21

V 2ct! de!t"%cti'e of the mo"ale of co-employee! con!tit%te !e"io%! mi!cond%ct.22

V )ommitting libel again!t an immediate !%pe"io" con!tit%te! !e"io%! mi!cond%ct. 23

V Po!!e!!ion o" %!e of !hab% o" othe" d"%g! i! a 'alid g"o%nd to te"minate

employment.24

V ,mmo"ality& a! a gene"al "%le& i! not a 3%!t g"o%nd to te"minate employment. The

e#ception i! hen !%ch immo"al cond%ct i! p"e3%dicial o" det"imental to the

inte"e!t of the employe".25

V ,mmo"al act committed beyond oJce ho%"! i! a 'alid g"o%nd to te"minate

employment.26

V Se#%al inte"co%"!e in!ide company p"emi!e! con!tit%te! !e"io%! mi!cond%ct.27

V The act of a /C-yea" old lady teache" in falling in lo'e ith a 1I-yea" old !t%dent i!

not immo"al.28

V Fighting i! a g"o%nd fo" te"mination b%t only the in!tigato" o" agg"e!!o" and not

the 'ictim ho a! con!t"ained to defend him!elf !ho%ld be di!mi!!ed.29

V Filing of c"iminal ca!e by an employee doe! not indicate hi! innocence.30

V )hallenging !%pe"io"! to a 5ght i! a 3%!t ca%!e fo" te"mination.31

V 2!!a%lting anothe" employee i! a 3%!t ca%!e fo" te"mination.32

V Utte"ance of ob!cene& in!%lting o" o8en!i'e o"d! con!tit%te! !e"io%!

mi!cond%ct.33

V Di!"e!pectf%l cond%ct i! not !e"io%! mi!cond%ct if p"o'oed by !%pe"io" o"

employe".34

V ambling ithin company p"emi!e! i! a !e"io%! mi!cond%ct.35

V Rende"ing !e"'ice to b%!ine!! "i'al i! a 3%!t ca%!e to te"minate employment.36

V Selling p"od%ct! of a competito" i! a 3%!t ca%!e fo" te"mination.37

V O"gani4ing a c"edit %nion by employee! in a ban i! a !e"io%! mi!cond%ct.38

V Decei'ing a c%!tome" fo" pe"!onal gain i! a 3%!t ca%!e fo" te"mination.39

V )ont"acting o" in competition ith employe" con!tit%te! !e"io%! mi!cond%ct.40

V Employe" need not !%8e" any damage! "e!%lting f"om a !e"io%! mi!cond%ct

committed by an employee again!t a c%!tome".

41

V ,nto#ication hich inte"fe"e! ith the employee$! o" con!tit%te! !e"io%!

mi!cond%ct.42

V The act of a teache" in p"e!!%"ing a colleag%e to change the failing g"ade of a

!t%dent i! !e"io%! mi!cond%ct.43

V Se#%al ha"a!!ment i! a 3%!t g"o%nd to di!mi!!.44

V Sleeping hile on d%ty i! a g"o%nd fo" te"mination.45

V Di!mi!!al i! too ha"!h a penalty fo" eating hile at o".46

V Pilfe"age o" theft of company-oned p"ope"ty i! a 3%!t ca%!e to te"minate.47

V Theft of f%nd! o" p"ope"ty not oned by employe" i! not a g"o%nd to te"minate. 48

V 2ct of fal!i5cation i! a 'alid g"o%nd to te"minate employment.49

V P%nching-in of time ca"d! of othe" employee! i! a 3%!t ca%!e fo" te"mination.50

V )i"c%lating fae meal ticet! i! a 3%!t ca%!e fo" te"mination.51





















































































,, .

,*SUHORD,*2T,O*

OR :,LLFUL D,SOHED,E*)E OF L2:FUL ORDERS

52

. REU,S,TES.

One of the f%ndamental d%tie! of an employee i! to obey all "ea!onable "%le!&

o"de"! and in!t"%ction! of the employe". ,n o"de" to 'alidly in'oe thi! g"o%nd& the folloing

"e%i!ite! m%!t be complied ith& to it<

1. The employee$! a!!ailed cond%ct m%!t ha'e been illf%l o" intentional& the

illf%lne!! being cha"acte"i4ed by a "ongf%l and pe"'e"!e attit%de; and

(. The o"de" 'iolated m%!t be ba!ed on a "ea!onable and laf%l company "%le&

"eg%lation o" policy and made non to the employee and m%!t pe"tain to the

d%tie! fo" hich he ha! been engaged to di!cha"ge.53

(. SO0E PR,*),PLES O* ,*SUHORD,*2T,O*.

Filing of a ca!e %e!tioning the 'alidity of "%le! and policie! doe! not p"e'ent employe"

f"om enfo"cing them.54

0aing fal!e allegation! in complaint doe! not con!tit%te in!%bo"dination.55

Fail%"e to an!e" memo to e#plain con!tit%te! illf%l di!obedience.56

2nothe" notice i! "e%i"ed in ca!e of te"mination on the g"o%nd of fail%"e to an!e"

memo to e#plain.57

:illf%lne!! of cond%ct may be ded%ced f"om the manne" the "eply i! "itten.58

Ref%!al to %nde"go "andom d"%g te!ting con!tit%te! both !e"io%! mi!cond%ct and

in!%bo"dination.59

P"olonged p"actice& not an e#c%!e fo" commi!!ion of "ongf%l act!.60

Ref%!al to "ende" o'e"time to meet p"od%ction deadline con!tit%te! in!%bo"dination. 61

Ref%!al to comply ith a laf%l t"an!fe" con!tit%te! in!%bo"dination.

62

,,,.

ROSS 2*D +2H,TU2L *ELE)T OF DUT,ES

63

. REU,S,TES.

The folloing a"e the "e%i!ite!<

=1? The"e m%!t be negligence hich i! g"o!! and>o" habit%al in cha"acte"; and

=(? ,t m%!t be o"-"elated a! o%ld mae him %n5t to o" fo" hi! employe".

(. SO0E PR,*),PLES O* ROSS 2*D +2H,TU2L *ELE)T OF DUT,ES.

Simple negligence i! not !%Jcient to te"minate employment.64

The negligence m%!t be g"o!! in cha"acte" hich mean! ab!ence of that diligence that

an o"dina"ily p"%dent man o%ld %!e in hi! on a8ai"!.65

2! a gene"al "%le& negligence m%!t be both g"o!! and habit%al to be a 'alid g"o%nd to

di!mi!!.66

+abit%ality may be di!"ega"ded if negligence i! g"o!! o" the damage o" lo!! i!

!%b!tantial.67 “4abitual negligence” implie! "epeated fail%"e to pe"fo"m one$! d%tie! fo" a

pe"iod of time& depending %pon the ci"c%m!tance!.68

*egligence i! a %e!tion of fact.69

,n the ab!ence of any fo"m of negligence& the di!mi!!al i! illegal.70

2ct%al damage& lo!! o" in3%"y i! not an e!!ential "e%i!ite. 71















































+ighe" deg"ee of diligence i! "e%i"ed in the baning ind%!t"y.72

"o!! negligence may "e!%lt to lo!! of t"%!t and con5dence.73

*o negligence if the act alleged to be !o i! in acco"dance ith !tanding company

p"actice.74

*o negligence if the act i! in acco"dance ith management-!anctioned de'iation! f"omthe company policy.75

2b!ence!& if a%tho"i4ed& cannot be cited a! a g"o%nd to te"minate employment. 76

Ta"dine!! o" ab!enteei!m& if not habit%al& cannot be cited a! a g"o%nd to te"minate

employment.77

Ta"dine!! o" ab!enteei!m& if habit%al& may be cited a! a g"o%nd to te"minate

employment.78

Ta"dine!! o" ab!enteei!m& if habit%al& may be tantamo%nt to !e"io%! mi!cond%ct.79

2b!ence! o" ta"dine!! d%e to eme"gency& ailment o" fo"t%ito%! e'ent a"e 3%!ti5ed and

may not be cited a! 3%!t ca%!e to te"minate employment. 80

0e"e allegation of ab!ence! o" ta"dine!! i! not !%Jcient; the b%"den of p"oof i! on the

employe".81

Unblemi!hed "eco"d belie! allegation of g"o!! and habit%al neglect.82

Un!ati!facto"y o" poo" pe"fo"mance& ineJciency and incompetence a"e con!ide"ed

3%!t ca%!e! fo" di!mi!!al only if they amo%nt to g"o!! and habit%al neglect of d%tie!.83

,@.

2H2*DO*0E*T OF :OR

84

. )O*)EPT.

2bandonment i! a fo"m of neglect of d%ty; hence& a 3%!t ca%!e fo" te"mination of

employment %nde" 2"ticle (B( b of the Labo" )ode.85

(. REU,S,TES.

To con!tit%te abandonment& to =(? element! m%!t conc%"& namely<

1. The employee m%!t ha'e failed to "epo"t fo" o" o" m%!t ha'e been ab!ent

itho%t 'alid o" 3%!ti5able "ea!on; and

(. The"e m%!t ha'e been a clea" intention on the pa"t of the employee to !e'e" the

employe"-employee "elation!hip manife!ted by !ome o'e"t act.86

/. SO0E PR,*),PLES O* 2H2*DO*0E*T.

0e"e ab!ence i! not eno%gh to con!tit%te abandonment.87

)lea" intention to !e'e" employment "elation!hip i! nece!!a"y.88

2n employee ho !topped o"ing beca%!e of he" mi!taen belief that !he ha! been

di!mi!!ed i! not g%ilty of abandonment.89

2bandonment i! a fact%al i!!%e.90

Employe" ha! the b%"den of p"oof to p"o'e abandonment. 91

The"e i! no abandonment hen it a! the employe" ho p"e'ented the o"e"! f"om

"epo"ting fo" o".92
















































D%e p"oce!! in abandonment ca!e! con!i!t! only of the !e"'ice of ( notice! to the

employee& &i@<

a. Fi"!t notice di"ecting the employee to e#plain hy he !ho%ld not be decla"ed a!

ha'ing abandoned hi! 3ob; and

b. Second notice to info"m him of the employe"$! deci!ion to di!mi!! him on the

g"o%nd of abandonment.93

*o hea"ing i! "e%i"ed to 'alidly di!mi!! an employee fo" abandonment. 94

*otice! in abandonment ca!e! m%!t be !ent to employee$! la!t non add"e!! pe"

"eco"d of the company. The employe" need not loo fo" the employee$! c%""ent

he"eabo%t!.95

Se"'ice of the notice! of abandonment of o" afte" the !i#-month pe"iod of 6Woating

!tat%!7 i! not 'alid.96

,mmediate 5ling of a complaint fo" illegal di!mi!!al p"aying fo" "ein!tatement negate!

abandonment. 97

Lap!e of time beteen di!mi!!al and 5ling of a ca!e i! not a mate"ial indication of

abandonment. +ence& lap!e of ( yea"! and A month!98 o" (C month!99 o" G

month!100 o" B month!101 befo"e 5ling the complaint fo" illegal di!mi!!al i! not an

indication of abandonment. Unde" the la& the employee ha! a 9-yea" p"e!c"ipti'e

pe"iod ithin hich to in!tit%te hi! action fo" illegal di!mi!!al.102

The fact that an employee 5led a complaint fo" illegal di!mi!!al i! not by it!elf !%Jcient

indicato" that he had no intention of de!e"ting hi! employment if the totality of hi!

antecedent act! palpably di!play the cont"a"y.103

Filing of a ca!e to p"e-empt in'e!tigation of the admini!t"ati'e ca!e i! tantamo%nt to

abandonment.104

:hen hat i! p"ayed fo" in the complaint i! !epa"ation pay and not "ein!tatement& the

5ling of complaint doe! not negate abandonment.105

,t i! abandonment hen hat i! p"ayed fo" in the complaint i! !epa"ation pay and it

a! only in the po!ition pape" that "ein!tatement a! p"ayed fo".106

Employment in anothe" 5"m coinciding ith the 5ling of complaint doe! not indicate

abandonment.107

The"e i! no abandonment hen it a! the employe" ho p"e'ented the o"e"! f"om

"epo"ting fo" o". 108

O8e" of "ein!tatement by employe" d%"ing p"oceeding! befo"e Labo" 2"bite" and"ef%!al by employee doe! not indicate abandonment b%t mo"e of a !ymptom of !t"ained

"elation! beteen the pa"tie!.109

S%bcont"acting fo" anothe" company indicate! abandonment.110

2n employee may be ab!ol'ed f"om the cha"ge of abandonment of o" b%t ad3%dged

g%ilty of 2:OL.111 The!e to g"o%nd! a"e !epa"ate and di!tinct f"om each othe".

2n employee ho failed to "epo"t fo" o" afte" the e#pi"ation of the d%ly app"o'ed

lea'e of ab!ence i! con!ide"ed to ha'e abandoned hi! 3ob.112

2n employee ho failed to comply ith the o"de" fo" hi! "ein!tatement i! deemed to

ha'e abandoned hi! o".113


















































2n employee ho& afte" being t"an!fe""ed to a ne a!!ignment& did not "epo"t fo" o"

anymo"e i! deemed to ha'e abandoned hi! 3ob.114

2n employee ho delibe"ately ab!ented f"om o" itho%t lea'e o" pe"mi!!ion f"om

hi! employe" fo" the p%"po!e of looing fo" a 3ob el!ehe"e i! deemed to ha'e

abandoned hi! o".115

,mp"i!onment o" detention by milita"y doe! not con!tit%te abandonment.116

2b!ence to e'ade a""e!t i! not a 'alid 3%!ti5cation. To do !o o%ld be to place

an imrimatur on the employee$! attempt to de"ail the no"mal co%"!e of the

admini!t"ation of 3%!tice.117

Re%e!ting fo" a )e"ti5cate of Employment i! not e'idence of abandonment.118

Employe"$! in!i!tence on commi!!ion of "ongf%l act! lie e!tafa and>o" %ali5ed theft

by the employee! negate! the cha"ge of abandonment.Rathe"& it !t"engthen! the 5nding

of petitione"$! di!c"imination& in!en!ibility and antagoni!m toa"d! the employee! hich

ga'e no choice to the latte" e#cept to fo"ego thei" employment.119

@.

FR2UD

120

1. CORRELATION O RAUD AND LOSS O TRUST AND CONIDENCE.

F"a%d i! !epa"ate and di!tinct f"om the othe" g"o%nd p"o'ided in the !ame

pa"ag"aph& that i!& lo!! of t"%!t and con5dence =illf%l b"each by the employee of the t"%!t

"epo!ed in him by hi! employe" o" d%ly a%tho"i4ed "ep"e!entati'e? .121

7owever, the coission of fraud by an eployee a*ainst the eployer

will necessarily result in the latter8s loss of trust and con9dence in the forer. n

the other hand, the *round of willful breach by the eployee of the trust andcon9dence reposed in hi by the eployer ay not necessarily involve fraud but

soe other acts that would siilarly result in the loss of such trust and

con9dence.

2. REUISITES.

The followin* are the re;uisites of this *round:

1. The eployee has coitted an intentional deception and

used dishonest ethods for personal *ain or to daa*e the eployer$

and

%. The fraud is wor0/related and rendered hi un9t to wor0 for his

eployer.122

/. SO0E PR,*),PLES O* FR2UD.

Fail%"e to depo!it collection con!tit%te! f"a%d.123

Lac of damage o" lo!!e! i! not nece!!a"y in f"a%d ca!e!. The fact that the employe"

did not !%8e" lo!!e! f"om the di!hone!ty of the di!mi!!ed employee beca%!e of it!

timely di!co'e"y doe! not e#c%!e the latte" f"om any c%lpability.124

Lac of mi!app"op"iation o" !ho"tage i! immate"ial in ca!e of %na%tho"i4edenca!hment of pe"!onal chec! by telle" and ca!hie".125




























Re!tit%tion doe! not ha'e ab!ol%to"y e8ect.126

@,.

:,LLFUL HRE2)+ OF TRUST 2*D )O*F,DE*)E

127

. REU,S,TES.

Fo" the doct"ine of lo!! of t"%!t and con5dence to apply& the folloing "e%i!ite!m%!t be !ati!5ed<

=1? The employee hold! a po!ition of t"%!t and con5dence;

=(? The"e e#i!t! an act 3%!tifying the lo!! of t"%!t and con5dence&128 hich mean! that

the act that bet"ay! the employe"$! t"%!t m%!t be "eal& i"e" & fo%nded on clea"ly

e!tabli!hed fact!;129

=/? The employee$! b"each of the t"%!t m%!t be illf%l& i"e" & it a! done intentionally&

noingly and p%"po!ely& itho%t 3%!ti5able e#c%!e;130 and

=9? The act m%!t be in "elation to hi! o" hich o%ld "ende" him %n5t to pe"fo"m

it.

(. U,DEL,*ES.

s a safe*uard a*ainst eployers who indiscriinately use <loss of trust

and con9dence= to 3ustify arbitrary disissal of eployees, the -upree Court, in

addition to the above eleents, cae up with the followin* *uidelines for the

application of the doctrine:131

(1) The loss of con9dence ust not be siulated$

(%) +t should not be used as a subterfu*e for causes which are ille*al,

iproper or un3usti9ed$

(') +t ay not be arbitrarily asserted in the face of overwhelin* evidence

to the contrary$ and

(4) +t ust be *enuine, not a ere afterthou*ht, to 3ustify earlier action

ta0en in bad faith.132

The fo"egoing g%ideline! ha'e been p"e!c"ibed by the S%p"eme )o%"t d%e to the

!%b3ecti'e nat%"e of thi! g"o%nd hich mae! te"mination ba!ed on lo!! of t"%!t and

con5dence p"one to ab%!e.133

/. SO0E PR,*),PLES O* T+E DO)TR,*E OF LOSS OF TRUST 2*D )O*F,DE*)E.

Employee$! po!ition m%!t be "epo!ed ith t"%!t and con5dence.134

6Po!ition of t"%!t and con5dence7 i! one he"e a pe"!on i! ent"%!ted ith con5dence

on delicate matte"!& o" ith the c%!tody& handling& o" ca"e and p"otection of the

employe"$! p"ope"ty.135

o =(? cla!!e! of po!ition! of t"%!t.

136 The rst class con!i!t! of manage"ial

employee! o" tho!e ho& by the nat%"e of thei" po!ition& a"e ent"%!ted ith con5dential

and delicate matte"! and f"om hom g"eate" 5delity to d%ty i! co""e!pondingly

e#pected. They "efe" to tho!e 'e!ted ith the poe"! o" p"e"ogati'e! to lay don and

e#ec%te management policie! and>o" to hi"e& t"an!fe" !%!pend& lay-o8& "ecall& di!cha"ge&

a!!ign o" di!cipline employee! o" to e8ecti'ely "ecommend !%ch manage"ial

action!.137 Thei" p"ima"y d%ty con!i!t! of the management of the e!tabli!hment in hich

they a"e employed o" of a depa"tment o" a !%bdi'i!ion the"eof. 138

The second class incl%de! 6ca!hie"!& a%dito"!& p"ope"ty c%!todian!& o" tho!e ho& in the

no"mal and "o%tine e#e"ci!e of thei" f%nction!& "eg%la"ly handle !igni5cant amo%nt! of the employe"$! money o" p"ope"ty.7 139 They a"e 5d%cia"y ran%-and-le employee! ho&







































tho%gh ran%-and-le& a"e "o%tinely cha"ged ith the c%!tody& handling o" ca"e and

p"otection of the employe"! money o" p"ope"ty&140 o" ent"%!ted ith con5dence on

delicate matte"!&141 and a"e th%! cla!!i5ed a! occ%pying po!ition! of t"%!t and

con5dence.142

R%le! on te"mination of manage"ial and !%pe"'i!o"y employee! di8e"ent f"om

tho!e applicable to "an-and-5le employee!. 2! a gene"al "%le& the doct"ine of 6t"%!t

and con5dence7 i! "e!t"icted to manage"ial employee!.143 Thi! mean! that the "%le! on

te"mination of employment applicable to manage"ial o" 5d%cia"y employee! a"e

di8e"ent f"om tho!e in'ol'ing o"dina"y employee! not holding po!ition! of t"%!t and

con5dence. ,n the latte" ca!e& me"e acc%!ation! by the employe" ill not be

!%Jcient.144 Th%!& ith "e!pect to "an-and-5le pe"!onnel& lo!! of t"%!t and con5dence

a! a g"o%nd fo" 'alid di!mi!!al "e%i"e! p"oof of in'ol'ement in the alleged e'ent! in

%e!tion and that me"e%nco""obo"ated a!!e"tion! and acc%!ation! by the employe"

ill not be !%Jcient. H%t a! "ega"d! a manage"ial employee& the me"e e#i!tence of a

ba!i! fo" belie'ing that he ha! b"eached the t"%!t of hi! employe" o%ld !%Jce fo" hi!

di!mi!!al.145

The"e m%!t be 6!ome ba!i!7 fo" the lo!! of t"%!t and con5dence hich mean! that

the"e i! "ea!onable g"o%nd to belie'e& if not to ente"tain the mo"al con'iction& that the

conce"ned employee i! "e!pon!ible fo" the mi!cond%ct and that the nat%"e of hi!

pa"ticipation the"ein "ende"ed him ab!ol%tely %no"thy of t"%!t and con5dence

demanded by hi! po!ition.146

,n te"mination fo" lo!! of t"%!t and con5dence& the fact that the employe" did not !%8e"

lo!!e! i! of no moment.147

Employe" ha! b%"den of p"oof .148

Di!mi!!al d%e to feng shui mi!match i! not a 'alid g"o%nd to lo!e t"%!t and

con5dence.149

)ommand "e!pon!ibility of manage"ial employee! i! a g"o%nd to di!mi!!. 150

)on5dential employee may be di!mi!!ed fo" lo!! of t"%!t and con5dence.151

"ant of p"omotion! and bon%!e! negate! lo!! of t"%!t and con5dence.152

Long yea"! of !e"'ice& ab!ence of de"ogato"y "eco"d and !mall amo%nt in'ol'ed a"e

deemed incon!e%ential in!ofa" a! lo!! of t"%!t and con5dence i! conce"ned.153

D"opping of c"iminal cha"ge! o" ac%ittal in a c"iminal ca!e a"i!ing f"om the !ame act

doe! not a8ect the 'alidity of di!mi!!al ba!ed on lo!! of t"%!t and con5dence.154

F%ll "e!tit%tion doe! not ab!ol'e employee of o8en!e hich "e!%lted in the lo!! of t"%!tand con5dence.155

@,,.

)O00,SS,O* OF )R,0E OR OFFE*SE

156

1. REUISITES.

The followin* are the re;uisites for the valid invocation of this *round:

1. crie or o>ense was coitted by the eployee$

%. +t was coitted a*ainst any of the followin* persons:













































=a? +i! employe";

=b? 2ny immediate membe" of hi! employe"$! family; o"

=c? +i! employe"$! d%ly a%tho"i4ed "ep"e!entati'e.

(. SO0E PR,*),PLES O* T+E )O00,SS,O* OF )R,0E OR OFFE*SE.

Heca%!e of it! g"a'ity& o"-"elation i! not nece!!a"y. *eithe" i! it nece!!a"y to !hothat the commi!!ion of the c"iminal act o%ld "ende" the employee %n5t to pe"fo"m hi!

o" fo" the employe".

The ph"a!e 6immediate members of the family 7 "efe"! to tho!e pe"!on! ha'ing family

"elation! %nde" 2"ticle 1AC of the Family )ode& to it<

=1? Heteen h%!band and ife;

=(? Heteen pa"ent! and child"en;

=/? 2mong othe" a!cendant! and de!cendant!; and

=9? 2mong b"othe"! and !i!te"!& hethe" of the f%ll o" half-blood.157

@,,,.

OT+ER 2*2LOOUS )2USES

158

. 2*2LOOUS )2USES U*DER EST2HL,S+ED KUR,SPRUDE*)E.

The followin* ay be cited as analo*ous causes:

1) ?iolation of copany rules and re*ulations.159

(? Theft of p"ope"ty oned by a co-employee& a! di!ting%i!hed f"om theft of

p"ope"ty oned by the employe".160

/? ,ncompetence& ineJciency o" ineptit%de.161

9? Fail%"e to attain o" %ota.162

A? Fail%"e to comply ith eight !tanda"d! of employe".163

I? 2ttit%de p"oblem7 i! analogo%! to lo!! of t"%!t and con5dence. 164

,;.

TER0,*2T,O* DUE TO E*FOR)E0E*T OF

U*,O* SE)UR,T1 )L2USE

165

. *2TURE OF ST,PUL2T,O*.

The “union security clause” i! a !tip%lation in a )H2166 hich allo! the pa"tie! the"eto

to ente" into an ag"eement "e%i"ing membe"!hip in the e#cl%!i'e collecti'e ba"gaining

agent hich !%cce!!f%lly negotiated !aid )H2 a! a condition fo" contin%ed employment ith

the e#ception of employee! ho a"e al"eady membe"! of anothe" %nion at the time of the

!igning of the )H2.

The 'alidity of di!mi!!al ba!ed on thi! g"o%nd hich 3%"i!p"%dentially i! con!ide"ed a

3%!t ca%!e& ha! lately been "eite"ated in the ca!e of 2labang )o%nt"y )l%b& ,nc. '.

*LR)&

167 he"e the S%p"eme )o%"t decla"ed that in addition to the g"o%nd! mentioned in

2"ticle! (B(& (B/& (B9 and (BA of the Labo" )ode& anothe" 3%!t ca%!e fo" te"mination i!

di!mi!!al f"om employment d%e to the enfo"cement of the %nion !ec%"ity cla%!e in the )H2.

(. EFFE)TS OF T+E 2PPL,)2T,O* OF T+E U*,O* SE)UR,T1 )L2USE.

The folloing a"e the e8ect!<

a. )n members of the bargaining unionDagent" They a"e not alloed to "e!ign o"

te"minate thei" membe"!hip the"ef"om. 2ny membe" of the ba"gaining agent



























ho "e!ign! o" i! e#pelled the"ef"om may be "ecommended to the employe" by

the ba"gaining agent fo" te"mination of hi! employment.

b. )n non-members of the bargaining unionDagent but members of the minority

unionDs" They a"e not bo%nd by the %nion !ec%"ity cla%!e if they a"e membe"! of

the mino"ity o" othe" %nion! at the time of the !igning of the )H2. +ence& they

cannot be compelled to "e!ign f"om thei" %nion>! in o"de" to 3oin the ba"gainingagent.

c. )n non-members of the bargaining unionDagent or of any minority unionDs" ,f

not a membe" of the ba"gaining agent o" any othe" %nion! in the ba"gaining %nit

at the time of the !igning of the )H2 by "ea!on of the fact that he i! e#cepted

f"om the co'e"age of the ba"gaining %nit& the employee cannot be compelled to

3oin the ba"gaining agent.

d. )n new emloyees hired after the signing of the C># containing the union

security clause" They can be compelled to 3oin the ba"gaining agent. ,f they

"ef%!e& they can be "ecommended fo" te"mination.

/. E;)EPT,O* TO 2PPL,)2T,O* OF T+E U*,O* SE)UR,T1 )L2USE.

Religious ground i! the only e#ception that may e8ecti'ely be in'oed again!t the

application of the %nion !ec%"ity cla%!e.168 Fo" e#ample< membe"! of the ,gle!ia ni "i!to

=,*? cannot be compelled to 3oin a %nion; hence& they a"e not bo%nd by the %nion !ec%"ity

doct"ine.169

9. REU,S,TES FOR T+E @2L,D TER0,*2T,O* DUE TO E*FOR)E0E*T OF U*,O*

SE)UR,T1 )L2USE.

=1? The %nion !ec%"ity cla%!e i! applicable;

=(? The ba"gaining %nion i! "e%e!ting fo" the te"mination of employment d%e to

enfo"cement of the %nion !ec%"ity p"o'i!ion in the )H2; and

=/? The"e i! !%Jcient e'idence to !%ppo"t the %nion$! deci!ion to e#pel the employee

f"om the %nion.

2ll the fo"egoing "e%i!ite! !ho%ld be complied ith to 3%!tify the te"mination of

employment.170

A. SO0E RELE@2*T PR,*),PLES.

Di!mi!!al e8ected by the employe" p%"!%ant to a labo" %nion$! demand in acco"dance

ith a %nion !ec%"ity ag"eement doe! not con!tit%te an %nfai" labo" p"actice.171

Employe" i! obligated to act %pon being demanded by the %nion to te"minate the

employment of it! e""ant membe"!.172

Employe" !ho%ld a8o"d d%e p"oce!! to the e#pelled %nioni!t.173

The employee !o%ght to be te"minated !ho%ld be a8o"ded an 6independent and

!epa"ate hea"ing7 hich mean! that the employe" i! not d%ty-bo%nd to immediately

implement the "ecommendation to te"minate made by the %nion. ,t ha! to cond%ct it!

on hea"ing independent and !epa"ate f"om any hea"ing cond%cted by the %nion. 174

Employe" ha! the liability fo" "ein!tatement& f%ll bacage!& damage! and atto"ney$! fee!

in illegal di!mi!!al ca!e! ba!ed on the %nion !ec%"ity cla%!e.175

The employe" ha! the "ight to be "eimb%"!ed fo" payment of any claim! a"i!ing o%t of

di!mi!!al! made %pon demand of the %nion %nde" the %nion !ec%"ity cla%!e.176

2.

A4*R0;E) !A4E177

. T:O =(? )L2SSES.

























@nder the Labor Code, authorized causes are classi9ed into two (%)

classes, naely:

(1) B!"&(""-$(%#( )%!"(". # 5eferrin* to the *rounds speci9cally

entioned in rticle %', to wit:

a. ,n!tallation of labo"-!a'ing de'ice;b. Red%ndancy;

c. Ret"enchment;

d. )lo!%"e o" ce!!ation of b%!ine!! ope"ation! *OT d%e to !e"io%! b%!ine!!

lo!!e! o" 5nancial "e'e"!e!; and

e. )lo!%"e o" ce!!ation of b%!ine!! ope"ation! d%e to !e"io%! b%!ine!! lo!!e!

and 5nancial "e'e"!e!.

=(? +ealth-"elated ca%!e!. M Refe""ing to di!ea!e co'e"ed by 2"ticle (B9 of the

Labo" )ode.

(. )O00O*2L,T1 OF REU,S,TES OF T+E 2UT+OR,ED )2USES U*DER 2RT,)LE (B/.

*otably& the"e a"e ce"tain "e%i!ite! that a"e common to the 5'e =A? g"o%nd! in2"ticle (B/. To !implify the di!c%!!ion& the folloing 5'e =A? common "e%i!ite! a"e applicable

to the !aid g"o%nd!<

1. The"e i! good faith in e8ecting the te"mination;

(. The te"mination i! a matte" of la!t "e!o"t& the"e being no othe" option a'ailable to

the employe" afte" "e!o"ting to co!t-c%tting mea!%"e!;

/. To =(? !epa"ate "itten notice! a"e !e"'ed on both the a8ected employee! and

the DOLE at lea!t one = ? month p"io" to the intended date of te"mination;

9. Sepa"ation pay i! paid to the a8ected employee!& to it<

=a? ,f ba!ed on = ? in!tallation of labo"-!a'ing de'ice& o" =(? "ed%ndancy. - One

=1? month pay o" at lea!t one =1? month pay fo" e'e"y yea" of !e"'ice&

hiche'e" i! highe"& a f"action of at lea!t !i# =I? month! !hall be con!ide"ed a!one =1? hole yea".

=b? ,f ba!ed on = ? "et"enchment& o" =(? clo!%"e *OT d%e !e"io%! b%!ine!!

lo!!e! o" 5nancial "e'e"!e!. - One =1? month pay o" at lea!t one-half =X?

month pay fo" e'e"y yea" of !e"'ice& hiche'e" i! highe"& a f"action of at lea!t

!i# =I? month! !hall be con!ide"ed a! one =1? hole yea".

=c? ,f clo!%"e i! d%e to !e"io%! b%!ine!! lo!!e! o" 5nancial

"e'e"!e!& *O !epa"ation pay i! "e%i"ed to be paid.

=d? ,n ca!e the )H2 o" company policy p"o'ide! fo" a highe" !epa"ation pay& the

!ame m%!t be folloed in!tead of the one p"o'ided in 2"ticle (B/.

A. Fai" and "ea!onable c"ite"ia in a!ce"taining hat po!ition! a"e to be a8ected by

the te"mination& !%ch a!& b%t not limited to< nat%"e of o"; !tat%! of employment=hethe" ca!%al& tempo"a"y o" "eg%la"? ; e#pe"ience; eJciency; !enio"ity;

dependability; adaptability; We#ibility; t"ainability; 3ob pe"fo"mance; di!cipline; and

attit%de toa"d! o".178 Fail%"e to follo fai" and "ea!onable c"ite"ia in !electing

ho to te"minate o%ld "ende" the te"mination in'alid.179

,.

,*ST2LL2T,O* OF L2HOR-S2@,* DE@,)E

. 2DD,T,O*2L REU,S,TE U*,UE TO T+,S ROU*D.

,n addition to the 5'e =A? common "e%i!ite! abo'e& the %ni%e "e%i!ite fo" thi!

g"o%nd i! that the p%"po!e fo" !%ch in!tallation m%!t be 'alid& !%ch a! to !a'e on co!t&

enhance eJciency and othe" 3%!ti5able economic "ea!on!.

180

(. SO0E RELE@2*T PR,*),PLES.










The in!tallation of the!e de'ice! i! a management p"e"ogati'e and the co%"t! ill not

inte"fe"e ith it! e#e"ci!e in the ab!ence of ab%!e of di!c"etion& a"bit"a"ine!!& o" malice

on the pa"t of management.181

Red%ndancy "e!%lt! f"om in!tallation of labo"-!a'ing de'ice. The in!tallation of

labo"-!a'ing de'ice ill "e!%lt in maing the po!ition! being held by employee! ho ill

be ad'e"!ely a8ected the"eby "ed%ndant and %nnece!!a"y.182

0ode"ni4ation p"og"am th"o%gh int"od%ction of high-!peed machine! i! 'alid.183

P"oof of lo!!e! i! not "e%i"ed.

,, .

REDU*D2*)1

. 2DD,T,O*2L REU,S,TE U*,UE TO T+,S ROU*D.

The fact of "ed%ndancy m%!t be p"o'ed. Red%ndancy e#i!t! %nde" any of the

folloing ci"c%m!tance!<

=1? :he"e the !e"'ice! of employee! a"e in e#ce!! of hat i! "ea!onably demandedby the act%al "e%i"ement! of the ente"p"i!e.184

=(? :he"e the po!ition i! !%pe"W%o%! beca%!e of a n%mbe" of facto"!& !%ch

a! o'e"-hi"ing of o"e"!& dec"ea!ed 'ol%me of b%!ine!!& d"opping of a

pa"tic%la" p"od%ct line o" !e"'ice acti'ity p"e'io%!ly man%fact%"ed o"

%nde"taen by the ente"p"i!e o" pha!ing o%t of !e"'ice acti'ity p"io"ly

%nde"taen by the b%!ine!!.185

=/? :he"e the"e i! d%plication of o". ,ndeed& in any ell-o"gani4ed b%!ine!!

ente"p"i!e& it o%ld be !%"p"i!ing to 5nd d%plication of o" and to =(? o" mo"e

people doing the o" of one pe"!on.186

=9? :he"e it i! 'alidly "e!o"ted to a! a co!t-c%tting mea!%"e and to !t"eamlineope"ation! !o a! to mae them mo"e 'iable. Po!ition! hich o'e"lapped each

othe"& o" hich a"e in e#ce!! of the "e%i"ement! of the !e"'ice& may be

decla"ed "ed%ndant.187

(. SO0E PR,*),PLES O* REDU*D2*)1.

The i!dom& !o%ndne!! o" cha"acte"i4ation of !e"'ice a! "ed%ndant by the

employe" i! not !%b3ect to "e'ie. The only e#ception i! hen the"e i! a !hoing that

the !ame a! done in 'iolation of la o" attended ith a"bit"a"y and malicio%!

action.188

H%"den of p"oof in "ed%ndancy "e!t! on the employe".189

E'idence of lo!!e! i! not "e%i"ed.190

Elimination of %nde!i"able!& ab%!e"! and o"!t pe"fo"me"! th"o%gh "ed%ndancy i!

not an indication of bad faith.191

The act of the employe" in hi"ing "eplacement! i! not an indication of bad faith if the

po!ition! ha'e no !imila" 3ob de!c"iption!.192

Red%ndancy to !a'e on labo" co!t! i! 'alid.193

Red%ndancy "e!%lting f"om %!e of high technology e%ipment i! 'alid.194

2bolition of po!ition! o" depa"tment! i! 'alid.195

Reo"gani4ation th"o%gh "ed%ndancy i! 'alid.196








































)ont"acting o%t of aboli!hed po!ition! to independent cont"acto"! i! 'alid.197

+i"ing of ca!%al! o" cont"act%al employee! afte" "ed%ndancy i! 'alid.198

:he"e to o" mo"e pe"!on! a"e pe"fo"ming the !ame o" hich may be e8ecti'ely

accompli!hed by only one& the employe" may te"minate the e#ce!! pe"!onnel and

"etain only one.199

E'en if the"e i! a !enio"ity "%le& !%ch a! the L,FO =La!t ,n& Fi"!t O%t? "%le& the nat%"e

of o" and e#pe"ience of the employee! !ho%ld !till be taen into acco%nt by the

employe".200

The L,FO o" F,LO =Fi"!t ,n& La!t O%t? "%le ha! no ba!i! in la.201

L,FO "%le i! not cont"olling a! employe" ha! the p"e"ogati'e to choo!e ho to

te"minate.202

,,,.

RETRE*)+0E*T

. RETRE*)+0E*T& DEF,*ED.

Ret"enchment ha! been de5ned a! 6the te"mination of employment initiated by the

employe" th"o%gh no fa%lt of the employee! and itho%t p"e3%dice to the latte"& "e!o"ted by

management d%"ing pe"iod! of b%!ine!! "ece!!ion& ind%!t"ial dep"e!!ion& o" !ea!onal

W%ct%ation!; o" d%"ing l%ll! occa!ioned by lac of o" o" o"de"!& !ho"tage of mate"ial!; o"

con!ide"able "ed%ction in the 'ol%me of the employe"$! b%!ine!!& con'e"!ion of the plant fo"

a ne p"od%ction p"og"am o" the int"od%ction of ne method! o" mo"e eJcient machine"y&

o" of a%tomation.7 203

(. 2DD,T,O*2L REU,S,TE U*,UE TO T+,S ROU*D.

P"oof of lo!!e! o" po!!ible imminent lo!!e! i! the di!tincti'e "e%i!ite of

"et"enchment. Thi! i! the only !tat%to"y g"o%nd in 2"ticle (B/ hich "e%i"e! thi! ind of

p"oof. The othe" g"o%nd! of clo!%"e o" ce!!ation of b%!ine!! ope"ation! may be "e!o"ted to

ith o" itho%t lo!!e!.204

/. ST2*D2RDS TO DETER0,*E @2L,D,T1 OF LOSSES 2S KUST,F,)2T,O* FOR

RETRE*)+0E*T.

The gene"al !tanda"d! in te"m! of hich the act of an employe" in "et"enching o"

"ed%cing the n%mbe" of it! employee! m%!t be app"ai!ed a"e a! follo!<

1. The lo!!e! e#pected !ho%ld be !%b!tantial and not me"ely de minimis o"

in!%b!tantial and incon!e%ential in e#tent.

(. The !%b!tantial lo!! app"ehended m%!t be "ea!onably imminent& a! !%ch

imminence can be pe"cei'ed ob3ecti'ely and in good faith by the employe".

/. Ret"enchment m%!t be "ea!onably nece!!a"y and liely to e8ecti'ely p"e'ent the

e#pected lo!!e!. The employe" !ho%ld ha'e taen othe" mea!%"e! p"io" o" pa"allel to

"et"enchment to fo"e!tall lo!!e!& i"e" & c%t othe" co!t! than labo" co!t!.

9. The alleged lo!!e!& if al"eady "eali4ed& and the e#pected imminent lo!!e! !o%ght

to be fo"e!talled& m%!t be p"o'ed by !%Jcient and con'incing e'idence th"o%gh

p"e!entation of e#te"nally a%dited 5nancial !tatement!.205

9. SO0E PR,*),PLES O* RETRE*)+0E*T.

,f !aid !tanda"d! a"e p"e!ent& i!dom to "et"ench cannot be %e!tioned.206
























The "et"enchment m%!t be done in good faith.207

*oto"iety of the employee i! a 'alid c"ite"ion.208

The p"og"e!!i'e manne" of implementing the !t"eamlining and don!i4ing of ope"ation!

"e!o"ted to by a con!t"%ction company in o"de" not to 3eopa"di4e the completion of it!

p"o3ect! i! 'alid. Th%!& !e'e"al depa"tment! lie the )i'il :o"! Di'i!ion& Elect"o-mechanical :o"! Di'i!ion and the Te""ito"ial P"o3ect 0anagement OJce!& among

othe"!& e"e aboli!hed in the ea"ly pa"t of 1GGI and the"eafte"& the St"%ct%"al Steel

Di'i!ion by the end of yea" 1GG.209

The fact that the"e ha! been economic o" othe" c"i!i! be!etting a pa"tic%la" !ecto" o"

the co%nt"y a! a hole i! not !%Jcient 3%!ti5cation fo" "et"enchment.210

2"ticle (B/ applie! only to pe"manent "et"enchment o" lay-o8. 211

)o!t-"ed%ction o" co!t-!a'ing mea!%"e! p"io" to "et"enchment a"e "e%i"ed.212

The ph"a!e 6"et"enchment to p"e'ent lo!!e!7 mean! that "et"enchment m%!t be

%nde"taen by the employe" befo"e the lo!!e! anticipated a"e act%ally !%!tained o""eali4ed. The employe" need not eep all hi! employee! %ntil afte" hi! lo!!e! !hall ha'e

mate"iali4ed. Othe"i!e& the la co%ld be '%lne"able to attac a! %nd%e taing of

p"ope"ty fo" the bene5t of anothe".213

Employe" bea"! the b%"den of p"oof to !ho b%!ine!! lo!!e! o" 5nancial "e'e"!e!.214

He!t e'idence of lo!!e! - 5nancial !tatement! a%dited by independent a%dito"!

=not by inte"nal a%dito"!? .

215

He!t e'idence of lo!!e! in a go'e"nment-cont"olled co"po"ation - 5nancial

!tatement! a%dited by )O2.

216

Pe"iod co'e"ed by 5nancial !tatement!& mate"ial.

217

ncome ta# "et%"n!& not 'alid !ince they a"e !elf-!e"'ing doc%ment!.

218

0e"e aJda'it on alleged lo!!e! i! not !%Jcient.219

0e"e notice of intention to implement a "et"enchment p"og"am i! not !%Jcient.220

Rehabilitation "ecei'e"!hip p"e!%ppo!e! e#i!tence of lo!!e!.221 +oe'e"& the fact that

the employe" i! %nde"going "ehabilitation "ecei'e"!hip doe! not by it!elf e#c%!e it f"om

!%bmitting to the labo" a%tho"itie! copie! of it! a%dited 5nancial !tatement! to p"o'e the

%"gency& nece!!ity and e#tent of it! "et"enchment p"og"am.222

2%dited 5nancial !tatement! !ho%ld be p"e!ented befo"e the Labo" 2"bite" o" the *LR)

b%t not belatedly befo"e the )o%"t of 2ppeal! o" S%p"eme )o%"t. 223

Ret"enchment e8ected long afte" the b%!ine!! lo!!e! i! not 'alid. 224

P"o5table ope"ation! in the pa!t do not a8ect the 'alidity of "et"enchment.225

)omp%l!o"y "eti"ement to p"e'ent f%"the" lo!!e! i! 'alid.226

Ea"ly Reti"ement P"og"am =ERP? to p"e'ent f%"the" lo!!e! and implemented p"io" to

"et"enchment i! 'alid.227

Rotation of o" may be tantamo%nt to con!t"%cti'e di!mi!!al o" "et"enchment. 228

Ret"enchment d%e to li%idity p"oblem i! not 'alid.229





















































Sha"p d"op in income i! not a g"o%nd to 3%!tify "et"enchment. 2 me"e decline in g"o!!

income cannot in any manne" be con!ide"ed a! !e"io%! b%!ine!! lo!!e!. ,t !ho%ld be

!%b!tantial& !%!tained and "eal.230

Litany of oe!& in the ab!ence of any !olid e'idence that they t"an!lated into !peci5c

and !%b!tantial lo!!e! that o%ld nece!!itate "et"enchment& ill not !%Jce to 3%!tify

"et"enchment.231

Rehi"ing of "et"enched employee! doe! not nece!!a"ily indicate illegality of

"et"enchment.232

,n an ente"p"i!e hich ha! !e'e"al b"anche! nationide& p"o5table ope"ation! in !ome

of them ill not a8ect the 'alidity of the "et"enchment if o'e"all& the 5nancial condition

the"eof "eWect! lo!!e!.233

,@.

)LOSURE OR )ESS2T,O* OF HUS,*ESS OPER2T,O*S

. )O*)EPT.

)lo!%"e o" ce!!ation of b%!ine!! i! the complete o" pa"tial ce!!ation of the

ope"ation! and>o" !h%tdon of the e!tabli!hment of the employe". ,t i! ca""ied o%t to eithe"

!ta'e o8 the 5nancial "%in o" p"omote the b%!ine!! inte"e!t of the employe".234

)lo!%"e in'ol'e! to =(? !it%ation!<

=a? :hen *OT d%e to !e"io%! b%!ine!! lo!!e! o" 5nancial "e'e"!e!; o"

=b? :hen d%e to !e"io%! b%!ine!! lo!!e! o" 5nancial "e'e"!e!

,t i! only in the rst that payment of !epa"ation pay i! "e%i"ed. *o !%ch

"e%i"ement i! impo!ed in the second .235

(. SO0E PR,*),PLES O* )LOSURE.

Employe" may clo!e it! b%!ine!! hethe" it i! !%8e"ing f"om b%!ine!! lo!!e! o" not;co%"t cannot o"de" employe" to contin%e it! b%!ine!!. 236

P"inciple of clo!%"e %nde" 2"ticle (B/ applie! in ca!e! of both total and pa"tial clo!%"e

o" ce!!ation of b%!ine!! ope"ation!. 0anagement may choo!e to clo!e only a b"anch&

a depa"tment& a plant& o" a !hop.237

)lo!%"e of depa"tment o" !ection and hi"ing of o"e"! !%pplied by independent

cont"acto" a! "eplacement! i! 'alid.238

Relocation of b%!ine!! may amo%nt to ce!!ation of ope"ation!.239

The b%"den of p"o'ing that the clo!%"e o" ce!!ation of b%!ine!! ope"ation! i! bona-

5de fall! %pon the employe".240

)lo!%"e may con!tit%te an %nfai" labo" p"actice if it i! "e!o"ted to a! a "%!e o" !cheme

to get "id of employee! on acco%nt of thei" %nion acti'itie!.241

)lo!%"e by "ea!on of enactment of a la i! 'alid. E#ample< The clo!%"e of the

Philippine @ete"an! Han by ope"ation of la =R.2. *o. 1IG 2n 2ct to Rehabilitate the

Philippine @ete"an! Han )"eated Unde" Rep%blic 2ct /A1B& P"o'iding the

0echani!m! The"efo" and fo" othe" P%"po!e!242 o" clo!%"e of the employe"$!

b%!ine!! beca%!e a la"ge po"tion of it! e!tate a! ac%i"ed by the Depa"tment of

2g"a"ian Refo"m p%"!%ant to the )omp"ehen!i'e 2g"a"ian Refo"m P"og"am =)2RP?

%nde" R.2. *o. IIA.243



































)lo!%"e of b%!ine!! to me"ge o" con!olidate ith anothe" o" to !ell o" di!po!e all of it!

a!!et!& held 'alid.244

2%dited 5nancial !tatement! nece!!a"y only in clo!%"e d%e to lo!!e!.

245

E'idence of lo!!e! in a clo!%"e ca!e !ho%ld not be p"e!ented fo" the 5"!t time on

appeal ith the )o%"t of 2ppeal! o" S%p"eme )o%"t.246

Fo" clo!%"e to be a 'alid ba!i!& it m%!t be in'oed at the time of te"mination and not

afte".247

)lo!%"e of a depa"tment o" !ection d%e to lo!!e! amo%nt! to "et"enchment. 248

@.

D,SE2SE

249

. REU,S,TES.

Di!ea!e i! one of the a%tho"i4ed ca%!e! to te"minate employment. The folloing

"e%i!ite! m%!t be complied ith befo"e te"mination of employment d%e to di!ea!e may be 3%!ti5ed<

1. The employee i! !%8e"ing f"om a di!ea!e;

(. +i! contin%ed employment i! eithe"<

a? p"ohibited by la; o"

b? p"e3%dicial to hi! health; o"

c? p"e3%dicial to the health of hi! co-employee!;

/. The"e i! a ce"ti5cation by a competent p%blic health a%tho"ity that the di!ea!e i!

of !%ch nat%"e o" at !%ch !tage that it cannot be c%"ed ithin a pe"iod of !i# =I?

month! e'en ith p"ope" medical t"eatment;

9. *otice of te"mination ba!ed on thi! g"o%nd !ho%ld be !epa"ately !e"'ed both tothe employee and the Depa"tment of Labo" and Employment at lea!t one =1?

month p"io" to the e8ecti'ity of the te"mination;250 and

A. Sepa"ation pay !ho%ld be paid to the employee in an amo%nt e%i'alent to at

lea!t one =1? month !ala"y o" to one-half =X? month !ala"y fo" e'e"y yea" of

!e"'ice& hiche'e" i! g"eate"& a f"action of at lea!t !i# =I? month! being con!ide"ed

a! one =1? hole yea".251

(. SO0E PR,*),PLES O* D,SE2SE.

H%"den of p"oof "e!t! on the employe".252

,f the di!ea!e o" ailment can be c%"ed ithin the pe"iod of !i# =I? month! ith p"ope"

medical t"eatment& the employe" !ho%ld not te"minate the employee b%t me"ely a!

him to tae a lea'e of ab!ence. The employe" !ho%ld "ein!tate him to hi! fo"me"

po!ition immediately %pon the "e!to"ation of hi! no"mal health.253

,n ca!e of death& 2"ticle (B9 doe! not apply.254

,n ca!e the employee %n"ea!onably "ef%!e! to !%bmit to medical e#amination o"

t"eatment %pon being "e%e!ted to do !o& the employe" may te"minate hi! !e"'ice! on

the g"o%nd of in!%bo"dination o" illf%l di!obedience of laf%l o"de".255

2 medical ce"ti5cate i!!%ed by a company$! on phy!ician i! not an acceptable

ce"ti5cate fo" p%"po!e! of te"minating an employment ba!ed on 2"ticle (B9& it ha'ing

been i!!%ed not by a 6competent p%blic health a%tho"ity&7 the pe"!on "efe""ed to in thela.256

































2 6competent p%blic health a%tho"ity7 "efe"! to a go'e"nment docto" ho!e

medical !peciali4ation pe"tain! to the di!ea!e being !%8e"ed by the employee. Fo"

in!tance& if the employee !%8e"! f"om t%be"c%lo!i!& the medical ce"ti5cate !ho%ld be

i!!%ed by a go'e"nment-employed p%lmonologi!t ho i! competent to mae an

opinion the"eon. ,f the employee ha! ca"diac !ymptom!& the competent phy!ician in

thi! ca!e o%ld be a ca"diologi!t.

0edical ce"ti5cate i! an indi!pen!able "e%i!ite.257 ,t i! the be!t e'idence of illne!!.258

he medical ce"ti5cate !ho%ld be p"oc%"ed by the employe" and not by the

employee.

259

The employe" ha! the b%"dent to p"o'e e#i!tence of the medical ce"ti5cate.260

Employee di!mi!!ed itho%t the medical ce"ti5cate i! entitled to mo"al and e#empla"y

damage!.261

Sepa"ate notice! of the te"mination to the a8ected employee and to the DOLE i!

nece!!a"y.262

+ea"ing i! not "e%i"ed& di!ea!e being an a%tho"i4ed ca%!e.

#.

)4E PR*!E263

<a7 8in-+otice Re9uirement

<b7 earing: eaning of *pportunity to be eard

. KO,*T D,S)USS,O*.

The fo"egoing topic! ill be di!c%!!ed he"ein 3ointly in the light of thei" clo!e

inte""elation.

(. T+E #3#>)' DO)TR,*E< DUE PRO)ESS ,* TER0,*2T,O* OF E0PLO10E*T REFERS

TO ST2TUTOR1& 2*D *OT )O*ST,TUT,O*2L& DUE PRO)ESS.

Pe" #gabon doct"ine&264 it i! no the p"e'ailing "%le that it i! not the d%e p"oce!!

p"o'ided in the )on!tit%tion265 that i! "e%i"ed in te"mination of employment b%t the

!tat%to"y d%e p"oce!! p"o'ided %nde" 2"ticle (b of the Labo" )ode.

6Constitutional due rocess” p"otect! the indi'id%al f"om the go'e"nment and

a!!%"e! him of hi! "ight! in c"iminal& ci'il o" admini!t"ati'e p"oceeding!; hile 6statutory due

rocess” p"otect! employee! f"om being %n3%!tly te"minated itho%t 3%!t ca%!e afte" noticeand hea"ing. P%t di8e"ently& the Hill of Right! i! not meant to be in'oed again!t act! of

p"i'ate indi'id%al! lie employe"!. P"i'ate action!& no matte" ho eg"egio%!& cannot 'iolate

the con!tit%tional g%a"antee!.

/. T+E #>>)88 0#>)R#8)R.:S DO)TR,*E< )O*TR2)TU2L DUE PRO)ESS.

a. *e doct"ine.

The no"m !ince #gabon i! that compliance ith the !tat%to"ily-p"e!c"ibed p"oced%"al

d%e p"oce!! %nde" 2"ticle (=b? 266 o%ld !%Jce. :hethe" the"e i! an e#i!ting company

policy hich al!o en%nciate! the p"oced%"al d%e p"oce!! in te"mination ca!e! need not be

con!ide"ed no" gi'en any eight in dete"mining the 'alidity of the te"mination.

+oe'e"& %nde" the late!t doct"inal en banc "%ling in the (C1/ ca!e of 2bbott

Labo"ato"ie!& Philippine! '. Pea"lie 2nn F. 2lca"a4&

267 it i! no "e%i"ed that





























in addition to compliance ith the !tat%to"y d%e p"oce!!& the employe" !ho%ld !till comply

ith the d%e p"oce!! p"oced%"e p"e!c"ibed in it! on company "%le!. The employe"$!

fail%"e to ob!e"'e it! on company-p"e!c"ibed d%e p"oce!! ill mae it liable to pay an

indemnity in the fo"m of nominal damage!& the amo%nt of hich i! e%i'alent to the

P/C&CCC.CC aa"ded %nde" the 2gabon doct"ine.

,t a! fo%nd in thi! ca!e of #bbott 0aboratories that "e!pondent 2lca"a4&268 ho a!

hi"ed a! a p"obationa"y manage"ial employee& a! a8o"ded both the !tat%to"ily-mandated

!%b!tanti'e and p"oced%"al d%e p"oce!!& hen !he a! te"minated 269 fo" fail%"e to %alify

a! a "eg%la" employee. *onethele!!& de!pite the e#i!tence of a !%Jcient g"o%nd to

te"minate 2lca"a4$! employment and 2bbott$! compliance ith the Labo" )ode te"mination

p"oced%"e& it a! fo%nd that petitione" 2bbott b"eached it! cont"act%al obligation to

2lca"a4 hen it failed to abide by it! on p"oced%"e in e'al%ating the pe"fo"mance of a

p"obationa"y employee. )ompany pe"!onnel policie! c"eate an obligation on the pa"t

of both the employee and the employe" to abide by the !ame.

Reco"d! !ho that 2bbott$! PPSE270 p"oced%"e mandate!& inter alia& that the 3ob

pe"fo"mance of a p"obationa"y employee !ho%ld be fo"mally"e'ieed and di!c%!!ed iththe employee at lea!t tice< rst & on the thi"d month and second & on the 5fth month f"om the

date of employment. 2bbotti! al!o "e%i"ed to come %p ith a Pe"fo"mance ,mp"o'ement

Plan d%"ing the thi"d month "e'ie to b"idge the gap beteen the employee$!pe"fo"mance

and the !tanda"d! !et& if any. ,n addition& a !igned copy of the PPSE fo"m !ho%ld be

!%bmitted to 2bbott$! +RD a! the !ame o%ld !e"'ea! ba!i! fo" "ecommending the

con5"mation o" te"mination of the p"obationa"y employment.

,n thi! ca!e& it i! appa"ent that 2bbott failed to follo the abo'e-!tated p"oced%"e in

e'al%ating 2lca"a4. Fo" one& the"e lie! a hiat%! of e'idence that a !igned copy of 2lca"a4$!

PPSE fo"m a! !%bmitted to the +RD. ,t a! not e'en !hon that a PPSE fo"m a!

completed to fo"mally a!!e!! he"pe"fo"mance. *eithe" a! the pe"fo"mance e'al%ation

di!c%!!ed ith he" d%"ing the thi"d and 5fth month! of he" employment. *o" did 2bbottcome%p ith the nece!!a"y Pe"fo"mance ,mp"o'ement Plan to p"ope"ly ga%ge 2lca"a4$!

pe"fo"mance ith the !et company !tanda"d!.

:hile it i! 2bbott$! management p"e"ogati'e to p"om%lgate it! on company "%le!

and e'en !%b!e%ently amend them& thi! "ight e%allydemand! that hen it doe! c"eate it!

on policie! and the"eafte" notify it! employee of the !ame& it acco"d! %pon it!elf the

obligation to faithf%llyimplement them. ,ndeed& a cont"a"y inte"p"etation o%ld entail

a di!ha"monio%! "elation!hip in the o" place fo" the labo"e" !ho%ld ne'e" be mi"ed by the

%nce"tainty of Wim!y "%le! in hich the latte"$! labo" "ight! and d%tie! o%ld& to !ome e#tent&

depend.

b. P"ope" !anction fo" lac of cont"act%al d%e p"oce!!.

,n impo!ing the penalty of indemnity in the fo"m of nominal damage! %pon

petitione" 2bbott& it a! held that hile the"e lie! d%e ca%!e to te"minate 2lca"a4$!

p"obationa"y employment fo" he" fail%"e to meet the !tanda"d! "e%i"ed fo" he"

"eg%la"i4ation& and hile it m%!t be f%"the" pointed o%t that 2bbott had !ati!5ed it!

!tat%to"y d%ty to !e"'e a "itten notice of te"mination& the fact that it 'iolated it! on

company p"oced%"e "ende"! the te"mination of 2lca"a4$! employment p"oced%"ally

in5"m& a""anting the payment of nominal damage!.

E'idently& the !anction! impo!ed in both #gabon271 and $a%a272 p"oceed f"om the

nece!!ity to dete" employe"! f"om f%t%"e 'iolation! of the !tat%to"y d%e p"oce!! "ight! of

employee!. ,n !imila" "ega"d& the )o%"t deem! it p"ope" to apply the !ame p"inciple to the

ca!e at ba" fo" the "ea!on that an employe"$! cont"act%al b"each of it! on companyp"oced%"e M albeit not !tat%to"y in !o%"ce M ha! the pa"allel e8ect of 'iolating the labo"e"$!













"ight!. S%Jce it to !tate& the cont"act i! the la beteen the pa"tie! and th%!& b"eache! of

the !ame impel "ecompen!e to 'indicate a "ight that ha! been'iolated. )on!e%ently& hile

the )o%"t i! ont to %phold the di!mi!!al of 2lca"a4 beca%!e a 'alid ca%!e e#i!t!& the

payment of nominal damage! onacco%nt of 2bbott$! cont"act%al b"each i! a""anted in

acco"dance ith 2"ticle (((1273 of the )i'il )ode.

c. P"ope" amo%nt of nominal damage!.

2nent the p"ope" amo%nt of damage! to be aa"ded& the )o%"t ob!e"'e! that

2lca"a4$! di!mi!!al p"oceeded f"om he" fail%"e to comply iththe !tanda"d! "e%i"ed fo" he"

"eg%la"i4ation. 2! !%ch& it i! %ndeniable that the di!mi!!al p"oce!! a!& in e8ect& initiated by

an act imp%table to theemployee& ain to di!mi!!al! d%e to 3%!t ca%!e! %nde" 2"ticle

(G274 (B( of the Labo" )ode. The"efo"e& the )o%"t deem! it app"op"iate to 5# the amo%nt

of nominal damage! at the amo%nt of P/C&CCC.CC& con!i!tent ith it! "%ling!

in both #gabon275 and $a%a" 276

9. PRO)EDUR2L DUE PRO)ESS @2R,ES DEPE*D,* O* T+E ROU*D>S ,*@OED.

Ha!ed on la and 3%"i!p"%dence& it i! clea" that the p"oced%"al d%e p"oce!! "e%i"ed

to 'alidly te"minate an employee depend! on the g"o%nd in'oed. The"e i! no %nifo"mp"oced%"al d%e p"oce!! that !ho%ld be applied in all ca!e!.

A. T+E ;.'3 )E ;.'3S 8R#'SP)R8 DO)TR,*E< PRO)EDUR2L DUE PRO)ESS ,* KUST

)2USE TER0,*2T,O*.

a. P"oced%"al !tep!.

,n 3%!t ca%!e te"mination& the tin-notice "e%i"ement applie!. 0o"e pa"tic%la"ly& the

folloing p"oced%"e in the o"de" p"e!ented belo !ho%ld be folloed<

1. Se"'ice of 5"!t "itten notice;

(. )ond%ct of hea"ing; and

/. Se"'ice of !econd "itten notice.

b. The ;ing of ;ings 8ransort doct"ine.

Ha!ed on thi! doct"ine hich a! en%nciated ining of ing! T"an!po"t& ,nc. '.

0amac&

277 the folloing "e%i"ement! !ho%ld be complied ith<

= ? Fi"!t "itten notice.

The 5"!t "itten notice to be !e"'ed on the employee !ho%ld<

a? )ontain the !peci5c ca%!e! o" g"o%nd! fo" te"mination again!t him;

b? )ontain a di"ecti'e that the employee i! gi'en the oppo"t%nity to !%bmit

hi! "itten e#planation ithin the "ea!onable pe"iod of F,@E =A? )2LE*D2R

D21S f"om "eceipt of the notice<

1? to enable him to p"epa"e ade%ately fo" hi! defen!e;

(? to !t%dy the acc%!ation again!t him;

/? to con!%lt a %nion oJcial o" laye";

9? to gathe" data and e'idence; and

A? to decide on the defen!e! he ill "ai!e again!t the complaint.

c? )ontain a detailed na""ation of the fact! and ci"c%m!tance! that ill !e"'e a!

ba!i! fo" the cha"ge again!t the employee. Thi! i! "e%i"ed in o"de" to enable

him to intelligently p"epa"e hi! e#planation and defen!e!. 2 gene"al

de!c"iption of the cha"ge ill not !%Jce.
















d? Speci5cally mention hich company "%le!& if any& a"e 'iolated and>o" hich

among the g"o%nd! %nde" 2"ticle (B( i! being cha"ged again!t the employee.

=(? +ea"ing "e%i"ed&

2fte" !e"'ing the rst notice& the employe" !ho%ld !ched%le and cond%ct

a hea"ing o" confe"ence he"ein the employee ill be gi'en the oppo"t%nity to<1? e#plain and cla"ify hi! defen!e! to the cha"ge>! again!t him;

(? p"e!ent e'idence in !%ppo"t of hi! defen!e!; and

/? "eb%t the e'idence p"e!ented again!t him by the management.

D%"ing the hea"ing o" confe"ence& the employee i! gi'en the chance to defend

him!elf pe"!onally& ith the a!!i!tance of a "ep"e!entati'e o" co%n!el of hi! choice.

0o"eo'e"& thi! confe"ence o" hea"ing co%ld be %!ed by the pa"tie! a! an oppo"t%nity to

come to an amicable !ettlement.

=/? Second "itten notice.

2fte" dete"mining that te"mination of employment i! 3%!ti5ed& the employe" !hall

!e"'e the employee! a "itten notice of te"minationindicating that<1? all ci"c%m!tance! in'ol'ing the cha"ge>! again!t the employee ha'e been

con!ide"ed; and

(? g"o%nd! ha'e been e!tabli!hed to 3%!tify the !e'e"ance of hi! employment.278

c. The fo"egoing "%le doe! not apply in ca!e of abandonment.

2bandonment i! a 3%!t ca%!e to te"minate employment. ,t i! con!ide"ed a fo"m of

g"o!! neglect of d%tie! %nde" 2"ticle (B(b of the Labo" )ode. +oe'e"& the p"oced%"al d%e

p"oce!! i! di8e"ent f"om the p"oce!! de!c"ibed abo'e. Fo" ob'io%! "ea!on& d%e p"oce!! in

abandonment ca!e! doe! not in'ol'e the cond%ct of hea"ing. )ompliance ith the folloing

to =(? notice! !%Jce!& &i@<

1? Eirst notice a!ing the employee to e#plain hy he !ho%ld not be decla"ed a!ha'ing abandoned hi! 3ob; and

(? Secondnotice info"ming him of the employe"$! deci!ion to di!mi!! him on the

g"o%nd of abandonment.

d. ThePere@ doct"ine.

The (CCG Pere@ doct"ine279 en%nciate! the neg%iding p"inciple! on

the hea"ing a!pect of p"oced%"al d%e p"oce!!. Thi! d"amatically modi5ed the concept of

hea"ing in 3%!t ca%!e te"mination. =See !epa"ate di!c%!!ion in *o. G belo? .

I. PRO)EDUR2L DUE PRO)ESS ,* 2UT+OR,ED )2USE TER0,*2T,O*.

D%e p"oce!! in a%tho"i4ed ca%!e te"mination i! deemed complied ith %pon the

!epa"ate and !im%ltaneo%! !e"'ice of a "itten notice of the intended te"mination to both<

=1? the employee to be te"minated; and

=(? the app"op"iate DOLE Regional OJce& at lea!t one = ? month befo"e the

intended date of the te"mination !pecifying the g"o%nd>! the"efo" and the

%nde"taing to pay the !epa"ation pay "e%i"ed %nde" 2"ticle (B/ of the Labo"

)ode.

. PRO)EDUR2L DUE PRO)ESS ,* DEF,*,TE-PER,OD E0PLO10E*T.

P"oced%"al d%e p"oce!! i! not "e%i"ed in te"mination of the folloing<

1. P"o3ect employment hich a%tomatically te"minate! %pon completion of the

p"o3ect;

(. Sea!onal employment hich a%tomatically te"minate! %pon the end of the

!ea!on;







/. )a!%al employment hich a%tomatically te"minate! %pon the lap!e of the ag"eed

pe"iod;

9. Fi#ed-te"m employment hich a%tomatically te"minate! %pon the e#pi"ation of

the 5#ed pe"iod.

B. PRO)EDUR2L DUE PRO)ESS ,* TER0,*2T,O* OF PROH2T,O*2R1 E0PLO10E*T.

P"obationa"y employment may be te"minated p"io" to the lap!e of the p"obationa"ype"iod f%" 3%!t o" a%tho"i4ed ca%!e; in hich ca!e& the app"op"iate& applicable p"oced%"al

d%e p"oce!! !ho%ld apply.

+oe'e"& if the g"o%nd in'oed i! the fail%"e of the p"obationa"y employee to

%alify a! a "eg%la" employee ba!ed on the "ea!onable !tanda"d! made non to him at

the time of hi! engagement& no d%e p"oce!! i! "e%i"ed. it i! !%Jcient that a "itten notice

of te"mination i! !e"'ed to the p"obationa"y employee ithin a "ea!onable time f"om the

e8ecti'e date the"eof !etting fo"th the 3%!ti5cation of !%ch te"mination.280

Pe" #bbott 0aboratories doct"ine& 281 hoe'e"& if the employe" ha! p"e!c"ibed in it!

company "%le! a ce"tain p"oced%"e fo" the te"mination of p"obationa"y employment& the

!ame !ho%ld be complied ith; othe"i!e& the employe" ill be penali4ed ith an indemnityin the fo"m of nominal damage! in the amo%nt of P/C&CCC.CC.

G. T+E PERE DO)TR,*E< *E: U,D,* PR,*),PLE O* T+E +E2R,* REU,RE0E*T.

The concept of hea"ing a! pa"t of d%e p"oce!! ha! been !igni5cantly changed by

the Pere@ doct"ine.282 ,t en%nciate! the neg%iding p"inciple!on the hea"ing a!pect of

p"oced%"al d%e p"oce!!. ,t ha! inte"p"eted the te"m 6ample oppo"t%nity to be hea"d7 in a

ne light& th%!<

=a? 62mple oppo"t%nity to be hea"d7 mean! any meaningf%l oppo"t%nity ='e"bal o"

"itten? gi'en to the employee to an!e" the cha"ge!again!t him and !%bmit

e'idence in !%ppo"t of hi! defen!e& hethe" in a hea"ing& confe"ence o" !ome

othe" fai"& 3%!t and "ea!onable ay.=b? 2 fo"mal hea"ing o" confe"ence i! no longe" mandato"y. ,t

become! mandato"yonly %nde" any of the folloing ci"c%m!tance!<

=1? :hen "e%e!ted by the employee in writing; o"

=(? :hen !%b!tantial e'identia"y di!p%te! e#i!t; o"

=/? :hen a company "%le o" p"actice "e%i"e! it; o"

=9? :hen !imila" ci"c%m!tance! 3%!tify it.

=c? the 6ample oppo"t%nity to be hea"d7 !tanda"d in the 0abor Code p"e'ail! o'e"

the 6hea"ing o" confe"ence7 "e%i"ement in it!.mlementing Rules and

Regulations. Thi! i! ho the S%p"eme )o%"t "e!ol'ed the conWict in the folloing

p"o'i!ion! of the Labo" )ode and it! implementing "%le!<

1? Unde" 2"ticle (=b? of the Labo" )ode& the employe" i! "e%i"ed to a8o"d the

employee 6ample oppo"t%nity to be hea"d and to defend him!elf ith

the a!!i!tance of hi! "ep"e!entati'e if he !o de!i"e!7; hile -

(? Unde" Section (=d? & R%le ,& Hoo @, of the ,mplementing R%le! of the Labo"

)ode& the employe" i! "e%i"ed to a8o"d to the employee a 6hea"ing o"

confe"ence d%"ing hich the employee conce"ned& ith the a!!i!tance

of co%n!el& if he !o de!i"e!& i! gi'en oppo"t%nity to "e!pond to the

cha"ge& p"e!ent hi! e'idence o" "eb%t the e'idence p"e!ented again!t

him.7











The Pere@ doct"ine i! no the p"e'ailing "%le a! !hon by a catena of ca!e! 283 hich

cited it afte" it! p"om%lgation.

C. SO0E PR,*),PLES O* +E2R,* REU,RE0E*T.

,f employee doe! not an!e"& hea"ing !ho%ld !till p"oceed.284

O%t"ight te"mination 'iolate! d%e p"oce!!.285

,n'e!tigation !till "e%i"ed e'en if incident a! itne!!ed by many.286

0eeting& dialog%e& con!%ltation o" inte"'ie i! not the hea"ing "e%i"ed by la. ,t may

not be a !%b!tit%te fo" the act%al holding of a hea"ing.287

P"io" con!%ltation ith %nion i! not pa"t of the d%e p"oce!! "e%i"ement.288

)"o!!-e#amination o" conf"ontation of itne!!e! i! not nece!!a"y in company

in'e!tigation!.289

)o-con!pi"ato"$! confe!!ion i! not !%Jcient to me"it di!mi!!al.290

,f a pa"ty a! not initially gi'en a chance to be hea"d at the company le'el& b%t late"a! gi'en f%ll oppo"t%nity to !%bmit po!ition pape"! o" p"e!ent hi! ca!e and a"g%ment!

befo"e the Labo" 2"bite"& thi! defect i! c%"ed.291 H%t if the di!mi!!al i! not 3%!ti5ed& thi!

p"inciple doe! not apply.292

. ,*ST2*)ES :+ERE +E2R,* ,S *OT REU,RED.

+ea"ing i! not "e%i"ed in the folloing ca!e!<

1. Te"mination of p"o3ect& !ea!onal& ca!%al o" 5#ed-te"m employment.

(. Te"mination of p"obationa"y employment on the g"o%nd of fail%"e of the

p"obationa"y employee to %alify a! a "eg%la" employee in acco"dance ith

"ea!onable !tanda"d! made non to him at the !ta"t of the employment.293

/. Te"mination d%e to abandonment of o".

9. Te"mination d%e to a%tho"i4ed ca%!e! %nde" 2"ticle (B/ =in!tallation of labo"-

!a'ing de'ice& "ed%ndancy& "et"enchment o" clo!%"e of b%!ine!! o" ce!!ation of

ope"ation!? . ,n !%ch ca!e!& the"e a"e no allegation! hich the employee! !ho%ld

"ef%te and defend them!el'e! f"om.294

A. Te"mination d%e to di!ea!e %nde" 2"ticle (B9.295

I. Te"mination by the employee ="e!ignation? %nde" 2"ticle (BA.

. Te"mination afte" I month! of bona-de !%!pen!ion of ope"ation %nde" 2"ticle

(BI. Fo" p%"po!e! of !ati!fying d%e p"oce!!& hat i! "e%i"ed i! !imply that the

notice! p"o'ided %nde" 2"ticle (B/ be !e"'ed to both the a8ected employee! and

the Depa"tment of Labo" and Employment at lea!t one =1? month befo"e the

te"mination become! e8ecti'e.296

B. Te"mination d%e to "eti"ement %nde" 2"ticle (B.

G. Te"mination d%e to e#pi"ation of ten%"e made cote"mino%! ith lea!e.297

1C. Te"mination d%e to clo!%"e o" !toppage of o" by go'e"nment a%tho"itie! hen

non-compliance ith the la o" implementing "%le! and "eg%lation! po!e! g"a'e

and imminent dange" to the health and !afety of o"e"! in the o"place.298

11. Te"mination d%e to e#pi"ation of cont"act%al employment in a legitimate

cont"acting o" !%bcont"acting a""angement.299

1(. Te"mination of employee ho ha! admitted hi! g%ilt fo" the o8en!e cha"ged.300

(. SE@E* =? ST2*D2RD S,TU2T,O*S ,* TER0,*2T,O* )2SES.










































The "%le! on te"mination of employment in the Labo" )ode and pe"tinent

3%"i!p"%dence a"e applicable to !e'en =? di8e"ent !it%ation!& namely<

1. The di!mi!!al a! fo" a 3%!t ca%!e %nde" 2"ticle (B(& fo" an a%tho"i4ed ca%!e %nde"

2"ticle (B/& o" fo" health "ea!on! %nde" 2"ticle (B9& and d%e p"oce!! a! ob!e"'ed M

Thi! te"mination i! LE2L.

301

(. The di!mi!!al a! itho%t a 3%!t o" a%tho"i4ed ca%!e b%t d%e p"oce!! a! ob!e"'ed

M Thi! te"mination i! ,LLE2L.

302

/. The di!mi!!al a! itho%t a 3%!t o" a%tho"i4ed ca%!e and d%e p"oce!! a! not

ob!e"'ed M Thi! te"mination i! ,LLE2L.

303

9. The di!mi!!al a! fo" a 3%!t o" a%tho"i4ed ca%!e b%t d%e p"oce!! a! not ob!e"'ed

M Thi! te"mination i! LE2L.

304

A. The di!mi!!al a! fo" a non-e#i!tent ca%!e M Thi! te"mination i! ,LLE2L.

305

I. The di!mi!!al a! not !%ppo"ted by any e'idence of te"mination M Thi! te"mination

i! *E,T+ER LE2L *OR ,LLE2L a! the"e i! no di!mi!!al to !pea

of.

306 Rein!tatement i! o"de"ed not a! a "elief fo" illegal di!mi!!al b%t on e%itable

g"o%nd.

. The di!mi!!al a! b"o%ght abo%t by the implementation of a la M Thi! te"mination

i! LE2L.

307

/. ,*DE0*,T1 ,* T+E FOR0 OF *O0,*2L D202ES.

a. 2pplication of the 2gabon and Kaa doct"ine!.

Te"mination fo" a 3%!t ca%!e o" a%tho"i4ed ca%!e b%t itho%t a8o"ding the employee

p"oced%"al d%e p"oce!! !ho%ld no longe" be con!ide"ed illegal o" ine8ect%al308 b%t legal.

)on!e%ently& the employee ill not be o"de"ed "ein!tated b%t ill be aa"ded anindemnity in the fo"m of nominal damage! the amo%nt of hich ill depend on hethe" the

te"mination i! g"o%nded on 3%!t ca%!e o" a%tho"i4ed ca%!e& th%!<

1. ,f ba!ed on 3%!t ca%!e M P/C&CCC.CC pe" #gabon doct"ine.309

(. ,f ba!ed on a%tho"i4ed ca%!e M PAC&CCC.CC pe" $a%a doct"ine.310

2cco"ding to $a%a& the indemnity i! stiFer” in ca!e of authori@ed cause te"mination

beca%!e& %nlie in the ca!e of just cause te"mination he"e the employee ha! committed a

"ongf%l act& an employee di!mi!!ed ba!ed on a%tho"i4ed ca%!e ha! not committed any

blameo"thy act no" any delin%ency o" c%lpability on hi! pa"t. ,n!tead& the di!mi!!al

p"oce!! i! initiated by the employe"$! e#e"ci!e of hi! management p"e"ogati'e& i"e" , hen theemploye" opt! to in!tall labo" !a'ing de'ice!& hen he decide! to cea!e b%!ine!! ope"ation!

o" hen& a! in thi! ca!e& he %nde"tae! to implement a "et"enchment p"og"am

b. Some p"inciple! %nde" the 2gabon doct"ine.

1. 0ea!%"e of penalty o" indemnity - no longe" f%ll bacage! b%t nominal damage!.

(. Since the di!mi!!al i! con!ide"ed legal& any aa"d of bacage! m%!t be deleted

and "eplaced by aa"d of indemnity.311

/. 2mo%nt of nominal damage! may be "ed%ced.312 H%t a! fa" a! the %pping of the

amo%nt i! conce"ned& a !%"'ey of S%p"eme )o%"t deci!ion! indicate! that the"e

ha! yet been no deci!ion inc"ea!ing the indemnity beyond hat ha! been

p"e!c"ibed in #gabon and $a%a.






























------------oOo------------

Chapter Four


OPICS PER SYLLABUS

!. Reliefs for 0llegal )ismissal

1. Reinstatementa. Pending appeal <Art. 22#= (abor !ode7b. eparation pay in lieu of reinstatement

2. ac>8agesa. !omputationb. (imited bac>8ages

!.RE(0EF F*R 0((E3A( )00A(

. REL,EFS U*DER 2RT,)LE (G OF T+E L2HOR )ODE.

Unde" thi! a"ticle&1 an illegally di!mi!!ed employee i! entitled to the folloing "elief!<

=1? Rein!tatement itho%t lo!! of !enio"ity "ight! and othe" p"i'ilege!;

=(? F%ll bacage!& incl%!i'e of alloance!; and

=/? Othe" bene5t! o" thei" moneta"y e%i'alent.

(. OT+ER REL,EFS *OT FOU*D ,* 2RT,)LE (G HUT 2:2RDED ,* ,LLE2L D,S0,SS2L

)2SES.

The folloing "elief! that a"e aa"ded in illegal di!mi!!al ca!e! a"e mi!!ing in 2"ticle(G<

=1? 2a"d of !epa"ation pay in lie% of "ein!tatement.

=(? 2a"d of penalty in the fo"m of nominal damage! in ca!e of te"mination d%e to

3%!t o" a%tho"i4ed ca%!e b%t itho%t ob!e"'ance of p"oced%"al d%e p"oce!!.

=/? Relief! to illegally di!mi!!ed employee ho!e employment i! fo" a 5#ed pe"iod.

The p"ope" "elief i! only the payment of the employee$! !ala"ie! co""e!ponding

to the %ne#pi"ed po"tion of the employment cont"act.

=9? 2a"d of damage! and atto"ney$! fee!.

=A? 2a"d of 5nancial a!!i!tance in ca!e! he"e the employee$! di!mi!!al i!

decla"ed legal b%t beca%!e of long yea"! of !e"'ice& and othe" con!ide"ation!&

5nancial a!!i!tance i! aa"ded.

=I? ,mpo!ition of legal inte"e!t on !epa"ation pay& bacage! and othe" moneta"y

aa"d!.

1.

RE0+AEE+

a.

PE+)0+3 APPEA(<Art0cle 22#= (abor !ode7

http://www.chanroblesbar.com.ph/index.php/lecture-materials/labor-law/2242-bar-subjects/labor-law/labor-law--prof-joselito-guianan-chan/2014-bar-exam-notes-on-labor-law-based-on-the-supreme-court-prescribed-syllabus-by-prof-joselito-guianan-chan/chapter-four-termination-of-employment-prof-joselito-guianan-chan/84759-c-reliefs-for-illegal-dismissal#_ftn1





b.

EPARA0*+ PA/0+ (0E4 *F RE0+AEE+

. @2R,OUS PRO@,S,O*S OF T+E L2HOR )ODE E*U*),2T,* T+E RE0ED1 OF

RE,*ST2TE0E*T.

The Labo" )ode g"ant! the "emedy of "ein!tatement in 'a"io%! fo"m! and !it%ation!.

,t! p"o'i!ion! "ecogni4ing "ein!tatement a! a "emedy a"e a! follo!<

1. 2"ticle ((/ hich p"o'ide! fo" "ein!tatement of an employee ho!e di!mi!!al i!

decla"ed illegal by the Labo" 2"bite". Thi! fo"m of "ein!tatement i! !elf-e#ec%to"y and m%!t

be implemented e'en d%"ing the pendency of the appeal that may be in!tit%ted by the

employe".

(. 2"ticle (I/ g hich p"o'ide! fo" a%tomatic "et%"n to o" of all !t"iing o"

loced-o%t employee!& if a !t"ie o" loco%t ha! al"eady taen place& %pon the i!!%ance by

the DOLE Sec"eta"y of an a!!%mption o" ce"ti5cation o"de". The employe" i! "e%i"ed to

immediately "e!%me ope"ation and "eadmit all o"e"! %nde" the !ame te"m! andcondition! p"e'ailing befo"e the !t"ie o" loco%t.

/. 2"ticle ( b hich empoe"! the DOLE Sec"eta"y to !%!pend the e8ect! of

te"mination pending the "e!ol%tion of the te"mination di!p%te in the e'ent of a rima

facie 5nding by the app"op"iate oJcial of the DOLE befo"e hom !%ch di!p%te i! pending

that the te"mination may ca%!e a !e"io%! labo" di!p%te o" i! in implementation of a ma!! lay-

o8.

9. 2"ticle (G hich g"ant! "ein!tatement a! a "elief to an employee ho!e

di!mi!!al i! decla"ed illegal in a 5nal and e#ec%to"y 3%dgment.

A. 2"ticle (BI hich in'ol'e! bona-5de !%!pen!ion of ope"ation fo" a pe"iod not

e#ceeding !i# =I? month! o" the "endition by an employee of milita"y o" ci'ic d%ty. ,t i!

"e%i"ed %nde" thi! p"o'i!ion that the employe" !ho%ld "ein!tate it! employee! %pon"e!%mption of it! ope"ation hich !ho%ld be done befo"e the lap!e of !aid !i#-month pe"iod

of bona-5de !%!pen!ion of ope"ation o" afte" the "endition by the employee! of milita"y o"

ci'ic d%ty.

<+*E? he reinstatement referred to in the Syllabus pertains only to the reinstatementunder Article 22#. )iscussion= therefore= 8ill focus on this relief7

a.

RE0+AEE+ PE+)0+3 APPEA(<Article 22#= (abor !ode7

. ORDER OF RE,*ST2TE0E*T ,SSUED H1 L2HOR 2RH,TER& ,00ED,2TEL1 E;E)UTOR1

E@E* PE*D,* 2PPE2L.

2"ticle ((/2 of the Labo" )ode& a! amended&3 p"o'ide! that an o"de" of

"ein!tatement by the Labo" 2"bite" i! !elf-e#ec%to"y and the"efo"eimmediately

e#ec%to"y e'en pending appeal. Heing !elf-e#ec%to"y& no "it of e#ec%tion i! "e%i"ed to be

i!!%ed to implement it.4 The concept of "ein!tatement %nde" 2"ticle ((/ i! to "e!to"e the

illegally di!mi!!ed employee to a !tate o" condition f"om hich he ha! been "emo'ed o"

!epa"ated.5 To %nde"!co"e it! immediate e#ec%to"y nat%"e& the ** '0RC Rules of

Procedure p"o'ide that the pe"fection of an appeal !hall !tay the e#ec%tion of the deci!ion of

the Labo" 2"bite" excet e#ec%tion fo" "ein!tatement pending appeal.6

Once an appeal i! 5led& the Labo" 2"bite" lo!e! 3%"i!diction o'e" the ca!e.

)on!e%ently& all pleading! and motion! pe"taining to the appealed ca!e a"e "e%i"ed to be

















add"e!!ed to and 5led ith the )ommi!!ion =*LR)? . Thi! "%le& hoe'e"& cannot be

in'oed to p"e3%dice the immediate "ein!tatement of an employee pending appeal.

7

(. D,ST,*U,S+ED FRO0 RE,*ST2TE0E*T ,SSUED H1 *LR)& )2 2*D S).

Hy ay of di!tinction& hile "it of e#ec%tion i! not "e%i"ed in ca!e "ein!tatement i!

o"de"ed by the Labo" 2"bite"& it i! nece!!a"y in ca!e "ein!tatement i! o"de"ed by the *LR)on appeal o" by the )2 and the S%p"eme )o%"t& a! the ca!e may be. Only the Labo" 2"bite"$!

"ein!tatement o"de" i! !elf-e#ec%to"y o" immediately e#ec%to"y.8

/. D,ST,*U,S+ED FRO0 RE,*ST2TE0E*T U*DER 2RT,)LE (G"

The followin* distinctions ay be cited between reinstateent under

rticle %%' and rticle %& of the Labor Code:

(1) &%&#. # The reinstateent under rticle %%' has not attained 9nality

as in fact it is the sub3ect of an appeal$ while that conteplated under rticle %&

has already becoe 9nal and e6ecutory.

(%) E+($" +#&+ #+ $(&"#%#(. # The reinstateent in the forer is

sub3ect to the e6ercise of option by the eployer$ while that in the latter, no such

option is available to the eployer e6cept to reinstate the eployee to his forer

position or to a substantially e;uivalent position.

(') O %#!$( +: !# +: L%;+$ A$;&#($ #+ &((# +$($. # +n the

forer, it is inisterial upon the Labor rbiter to ipleent his order of

reinstateent which is self/e6ecutory in character$9 while in the latter, it is not

inisterial as it re;uires the 9lin* of a otion for the issuance of writ of e6ecution

before the Labor rbiter can ipleent the order of reinstateent.

(4) O ()(""&# :+$ &""!%)( +: <$&# +: (=()!#&+. / +n the forer, a

writ of e6ecution is not necessary to enforce the reinstateent order$ while in the

latter, a writ of e6ecution is indispensable to e>ect reinstateent.

9. RE,*ST2TE0E*T PE*D,* 2PPE2L 2PPL,ES TO 2LL ,*DS OF ,LLE2L D,S0,SS2L

)2SES.

The concept of "ein!tatement pending appeal %nde" 2"ticle ((/ contemplate! all

ind! of illegal di!mi!!al ca!e!. The nat%"e of the g"o%nd in'oed to 3%!tify the di!mi!!al

hich !%b!e%ently i! decla"ed illegal i! incon!e%ential in dete"mining the 'alidity of thi!

"emedy.

The )o%"t of 2ppeal!& in the (C1C ca!e of ). 2lcanta"a N Son!& ,nc. '. )2&

10 denied

the "ein!tatement of the o"dina"y %nion membe"! ho pa"ticipated in the illegal !t"ie b%t

ho!e di!mi!!al a! fo%nd to ha'e been illegally e8ected !ince they did not commit any

illegal act! in the co%"!e of the !t"ie. The )2 3%!ti5ed it! denial by "%ling that the

"ein!tatement pending appeal p"o'ided %nde" 2"ticle ((/ contemplate! illegal di!mi!!al o"

te"mination ca!e! and not ca!e! %nde" 2"ticle (I9.11 The S%p"eme )o%"t& hoe'e"&

p"ono%nced that thi! pe"cei'ed di!tinction doe! not 5nd !%ppo"t in the p"o'i!ion! of the

Labo" )ode. The g"o%nd! fo" te"mination %nde" 2"ticle (I9 a"e ba!ed on p"ohibited act!

that employee! co%ld commit d%"ing a !t"ie. On the othe" hand& the g"o%nd! fo"

te"mination %nde" 2"ticle! (B(&12

(B/13

and (B914

a"e ba!ed on the employee$! cond%ct inconnection ith hi! a!!igned o". Still& 2"ticle (1&15 hich de5ne! the poe"! of Labo"


























2"bite"!& 'e!t! in the latte" 3%"i!diction o'e" all te"mination ca!e!& hate'e" be the g"o%nd!

gi'en fo" the te"mination of employment. )on!e%ently& 2"ticle ((/& hich p"o'ide! that

the deci!ion of the Labo" 2"bite" "ein!tating a di!mi!!ed employee !hall immediately be

e#ec%to"y pending appeal& cannot b%t apply to all te"mination! i""e!pecti'e of the g"o%nd!

on hich they a"e ba!ed.

A. RE,*ST2TE0E*T PE*D,* 2PPE2L DOES *OT 2PPL1 :+E* T+E D,S0,SS2L ,S

LE2L HUT RE,*ST2TE0E*T ,S ORDERED FOR SO0E RE2SO*S L,E EU,T1 2*D

)O0P2SS,O*2TE KUST,)E.

The p"inciple of "ein!tatement pending appeal applie! only in ca!e the"e i! a 5nding

of illegality of di!mi!!al by the Labo" 2"bite". ,n othe" o"d!& if the di!mi!!al i! not illegal a! in

fact it a! decla"ed 'alid and legal by the Labo" 2"bite"& the "ein!tatement g"anted by "ea!on

of e%ity and compa!!ionate 3%!tice cannot be e#ec%ted pending appeal; neithe" can the

employe" be held liable fo" payment of any "ein!tatement age!.

This is the *ist of the Lansangan doctrine which was enunciated pursuant

to and by virtue of the pronounceent in Lansangan ! "m#or $echnology Philippines% Inc! 16 The petitioners in this case were found by the Labor rbiter to

have coitted a dishonest act consistin* of:

“[s]wiping another employees’ [sic] I.D. card or requesting another employee to swipe

one’s I.D. card to gain personal advantage and/or in the interest of cheating”, an

offense of dishonesty punishable as a serious form of misconduct and fraud or breach

of trust under Article 297 [282] of the Labor Code:

xxx

which allows the dismissal of an employee for a valid cause.”

The Labor rbiter conse;uently ruled that the disissal was valid and le*al

but he ordered their reinstateent to their forer positions without bac0wa*es

<as a easure of e;uitable and copassionate relief= owin* ainly to petitioners8

prior unbleished eployent records, show of reorse, harshness of the

penalty and defective attendance onitorin* syste of respondent copany.

Aased on these facts, the -upree Court noted that the principle

of reinstatement pending appeal under rticle %%' on which the appellate court

relied, 9nds no application in the present case. rticle %%' concerns itself with an

interi relief, *ranted to a disissed or separated eployee while the case for

ille*al disissal is pendin* appeal. I# +(" +# % <($( #($( &" +

>&/ +: &(/% &"&""% %" & #( $("(# )%"(. Burther, petitioners are

not also entitled to full bac0wa*es as their disissal was not found to be ille*al.

"gabon ! &L'C%17 so states / payent of bac0wa*es and other bene9ts is

3usti9ed + &: the eployee was !?!"# disissed.

I. T:O =(? OPT,O*S OF T+E E0PLO1ER.

The employe" ha! only ( option! both of hich in'ol'e "ein!tatement<

=1? 2ct%al "ein!tatement& i"e" & the employee !ho%ld be "ein!tated to hi! po!ition

hich he occ%pie! p"io" to hi! illegal di!mi!!al %nde" the !ame te"m! and

condition! p"e'ailing p"io" to hi! di!mi!!al o" !epa"ation o"& if no longe"

a'ailable& to a !%b!tantially-e%i'alent po!ition; o"








=(? Pay"oll "ein!tatement& i"e" & "ein!tatement of the employee in the pay"oll of

the company itho%t "e%i"ing him to "epo"t bac to hi! o".18

The"e i! no ay the employe" can di!"ega"d the "ein!tatement o"de". Po!ting of a

bond doe! not !tay the e#ec%tion of immediate "ein!tatement.19

. OHL,2T,O* OF E0PLO1ER TO *OT,F1 RE,*ST2TED E0PLO1EE OF +,S )+O,)E OF

OPT,O*.

Employe" ha! the obligation to notify employee of hi! choice of option. 20 Unde"

the ** '0RC Rules of Procedure&21 it i! "e%i"ed that the employe" !ho%ld !%bmit a "epo"t of

compliance ithin ten =1C? calenda" day! f"om "eceipt of the Labo" 2"bite"$! deci!ion&

di!obedience to hich clea"ly denote! a "ef%!al to "ein!tate.

8. INSTANCES @EN @RIT O EECUTION O LABOR ARBITERS

REINSTATEENT ORDER IS STILL REUIRED.

@nder the ()** &L'C 'ules of Procedure%22 there are two (%) instances

when a writ of e6ecution should still be issued iediately by the Labor rbiter to

ipleent his order of reinstateent, even pendin* appeal, i+ :

=1? :hen the employe" di!obey! the Rules-p"e!c"ibed di"ecti'e23 to !%bmit a "epo"t

of compliance ithin ten =1C? calenda" day! f"om "eceipt of the deci!ion; o"

=(? :hen the employe" "ef%!e! to "ein!tate the di!mi!!ed employee.

The Labo" 2"bite" !hall motu rorio i!!%e a co""e!ponding "it to !ati!fy the

"ein!tatement age! a! they acc"%e %ntil act%al "ein!tatement o" "e'e"!al of the o"de" of

"ein!tatement.24

The employee need not 5le a motion fo" the i!!%ance of the "it of e#ec%tion !ince

the Labo" 2"bite" !hall the"eafte" motu rorio i!!%e the "it.25

Employe" may be cited fo"contempt fo" hi! "ef%!al to comply ith the o"de" of "ein!tatement.26

Employe" i! liable to pay the !ala"ie! fo" the pe"iod that the employee a! o"de"ed

"ein!tated pending appeal e'en if hi! di!mi!!al i! late" 5nally fo%nd to be legal on appeal. 27

G. EFFE)T OF F2,LURE OF E0PLO1EE ORDERED RE,*ST2TED PE*D,* 2PPE2L TO

REPORT H2) TO :OR 2S D,RE)TED H1 E0PLO1ER.

The p"o'i!ion of 2"ticle ((/ on "ein!tatement pending appeal i! intended fo" the

bene5t of the employee and cannot be %!ed to defeat hi! on inte"e!t. The la mandate!

the employe" to eithe" admit the di!mi!!ed employee bac to o" %nde" the !ame te"m!

and condition! p"e'ailing p"io" to hi! di!mi!!al o" to "ein!tate him in the pay"oll to abate

f%"the" lo!! of income on the pa"t of the employee d%"ing the pendency of the appeal. H%tthe lang%age of the la !ho%ld not be !t"etched a! to gi'e the employe" the "ight to "emo'e

an employee ho fail! to immediately comply ith the "ein!tatement o"de"& e!pecially hen

the"e i! a "ea!onable e#planation fo" hi! fail%"e. 28

,n the (C11 ca!e of P54e"& ,nc. '. @ela!co&

29 petitione" P54e" contend! that the

)o%"t of 2ppeal! committed a !e"io%! b%t "e'e"!ible e""o" hen it o"de"ed petitione" P54e"

to pay "e!pondent @ela!co age! f"om the date of the Labo" 2"bite"$! deci!ion o"de"ing he"

"ein!tatement %ntil *o'embe" (/& (CCA& hen the )o%"t of 2ppeal! "ende"ed it! deci!ion

decla"ing @ela!co$! di!mi!!al 'alid. D%"ing the pendency of the ca!e ith the )o%"t of

2ppeal! and p"io" to it! *o'embe" (/& (CCA deci!ion& petitione" claimed that it had al"eady

"e%i"ed "e!pondent to "epo"t fo" o" on K%ly & (CCA. +oe'e"& acco"ding to petitione"& ita! "e!pondent ho "ef%!ed to "et%"n to o" hen !he "ote petitione"& th"o%gh co%n!el&
































that !he a! opting to "ecei'e he" !epa"ation pay and to a'ail of petitione"$! ea"ly "eti"ement

p"og"am. ,n petitione" P54e"$! 'ie& it !ho%ld no longe" be "e%i"ed to pay age! con!ide"ing

that it a! allegedly "eady to "ein!tate "e!pondent a! of K%ly & (CCA b%t it a! "e!pondent

ho %n3%!ti5ably "ef%!ed to "epo"t fo" o". 2cco"ding to petitione"& it o%ld be tantamo%nt

to alloing "e!pondent to choo!e 6pay"oll "ein!tatement7 hen by la it a! the employe"

hich had the "ight to choo!e beteen act%al and pay"oll "ein!tatement.

The S%p"eme )o%"t& hoe'e"& fo%nd thi! contention of petitione" de'oid of me"it

con!ide"ing the folloing<

=1? Petitione" aited fo" the "e!ol%tion of it! appeal to the *LR) and& only afte" it a!

o"de"ed by the Labo" 2"bite" to pay the amo%nt ofP1&GI/&BAA.CC "ep"e!enting "e!pondent$!

f%ll bacage! f"om Decembe" A& (CC/ %p to 0ay A& (CCA& did petitione" decide to "e%i"e

"e!pondent to "epo"t bac to o" &ia the Lette" dated K%ne (& (CCA.

=(? The !aid lette" doe! not confo"m to the di"ecti'e in 2"ticle ((/ that an employee

entitled to "ein!tatement 6!hall eithe" be admitted bac to o" %nde" the !ame te"m!

and condition! p"e'ailing p"io" to hi! di!mi!!al o" !epa"ation o"& at the option of the

employe"& me"ely "ein!tated in the pay"oll.7

=/? The lette" of "e!pondent to petitione" indicating he" p"efe"ence fo" the payment

of !epa"ation pay in lie% of "ein!tatement i! of no moment. ,t doe! not ha'e the e8ect of

taing aay the option f"om the employe" to e8ect act%al o" pay"oll "ein!tatement.

C. SO0E PR,*),PLES O* RE,*ST2TE0E*T PE*D,* 2PPE2L U*DER 2RT,)LE ((/.

Rein!tatement pending appeal %nde" 2"ticle ((/ i! con!tit%tional.30

,t i! !imila" to "et%"n-to-o" o"de".31

The Labo" 2"bite" cannot e#e"ci!e option of employe" by choo!ing pay"oll

"ein!tatement pending appeal.32

,f the fo"me" po!ition i! al"eady 5lled %p& the employee o"de"ed "ein!tated %nde"

2"ticle ((/ !ho%ld be admitted bac to o" in a !%b!tantially e%i'alent po!ition. 33

Rein!tatement to a po!ition loe" in "an i! not p"ope".34

Rein!tatement cannot be "ef%!ed on the ba!i! of the employment el!ehe"e of the

employee o"de"ed "ein!tated.35

,n ca!e of to !%cce!!i'e di!mi!!al!& the o"de" of "ein!tatement pending appeal %nde"

2"ticle ((/ i!!%ed in the rst ca!e !hall apply only to therst ca!e and !ho%ld not a8ect

the !econd di!mi!!al.36

The fail%"e of the illegally di!mi!!ed employee ho a! o"de"ed "ein!tated to "epo"tbac to o" doe! not gi'e the employe" the "ight to "emo'e him& e!pecially hen the"e

i! a "ea!onable e#planation fo" hi! fail%"e.37

*o "ein!tatement pending appeal !ho%ld be made hen antipathy and antagoni!m

e#i!t.38

,f "ein!tatement i! not !tated in the Labo" 2"bite"$! deci!ion =neithe" in the di!po!iti'e

po"tion no" in the te#t the"eof? & "ein!tatement i! not a""anted.39

(NOTE: For discussion on the effect of NLRC’s reversal of the Labor Arbiter’s order of

reinstatement, please read the comments on the topic:“VIII. PROCEDURE AND

























JURISDICITON, xxx B. National Labor Relations Commission (NLRC) , xxx 2. Effect of

NLRC Reversal of Labor Arbiter’s Order of Reinstatement,” infra)

b.

EPARA0*+ PA/ 0+ (0E4 *F RE0+AEE+

. *O PRO@,S,O* ,* T+E L2HOR )ODE E;PRESSL1 R2*T,* SEP2R2T,O* P21 ,*

L,EU OF RE,*ST2TE0E*T.

rticle %& e6pressly andates only reinstateent and never the

alternative reedy of separation pay in lieu thereof.

Aut 3urisprudence clearly enunciates the award of separation pay in the

event reinstateent is not possible or feasible.40 @ndeniably, it is a recourse

based on e;uity that has been sanctioned by the -upree Court in a catena of

cases.41

(. SPE),F,) ,*ST2*)ES :+ERE SEP2R2T,O* P21 ,* L,EU OF RE,*ST2TE0E*T :2S

2:2RDED.

,t i! no ell-!ettled that !epa"ation pay in lie% of "ein!tatement !ho%ld be aa"ded

in the folloing !it%ation!<

=1? :he"e the contin%ed "elation!hip beteen the employe" and the employee i! no

longe" 'iable d%e to the strained relations and antagoni!m beteen them

=Doct"ine of St"ained Relation!? .42

=(? :hen "ein!tatement p"o'e! impo!!ible& imp"acticable& not fea!ible o"

%na""anted fo" 'a"ied "ea!on! and th%! ha"dly in the be!t inte"e!t of the pa"tie!

!%ch a!<

=a? :he"e the employee ha! al"eady been "eplaced pe"manently a! hen hi!po!ition ha! al"eady been taen o'e" by a "eg%la" employee and the"e i! no

!%b!tantially e%i'alent po!ition to hich he may be "ein!tated.43

=b? :he"e the di!mi!!ed employee$! po!ition i! no longe" a'ailable at the time of

"ein!tatement fo" "ea!on! not att"ib%table to the fa%lt of the employe".44

=c? :hen the"e ha! been long lap!e o" pa!!age of time that the employee a! o%t

of employe"$! employ f"om the date of the di!mi!!al to the 5nal "e!ol%tion of

the ca!e45 o" beca%!e of the "ealitie! of the !it%ation.46

=d? Hy "ea!on of the in3%"y !%8e"ed by the employee. 47

=e? The employee ha! al"eady "eached "eti"ement age %nde" a Reti"ement Plan.48

=f? :hen the illegally di!mi!!ed employee! a"e o'e"-age o" beyond the

comp%l!o"y "eti"ement age and thei" "ein!tatement o%ld %n3%!tly p"e3%dicethei" employe".49

=g? :hen "ein!tatement of a !ec%"ity g%a"d can no longe" be o"de"ed beca%!e he

a! pa!t the age %ali5cation fo" a !ec%"ity g%a"d licen!e.50

=h? :hen the gene"al !ale! agency cont"act beteen the employe" and it! client

ha! been te"minated and "ein!tatement i! no longe" fea!ible.51

=i? Taeo'e" of the b%!ine!! of the employe" by anothe" company and the"e i! no

ag"eement "ega"ding a!!%mption of liability by the ac%i"ing company.52

=/? :he"e the employee decide! not to be "ein!tated a! hen he doe! not p"ay fo"

"ein!tatement in hi! complaint o" po!ition pape" b%t a!ed fo" !epa"ation pay

in!tead.53



































=9? :hen "ein!tatement i! "ende"ed moot and academic d%e to !%pe"'ening e'ent!&

!%ch a!<

=a? Death of the illegally di!mi!!ed employee.54

=b? Decla"ation of in!ol'ency of the employe" by the co%"t.55

=c? Fi"e hich g%tted the employe"$! e!tabli!hment and "e!%lted in it! total

de!t"%ction.56

=d? ,n ca!e the e!tabli!hment he"e the employee i! to be "ein!tated ha! clo!ed

o" cea!ed ope"ation!.57

=A? To p"e'ent f%"the" delay in the e#ec%tion of the deci!ion to the p"e3%dice of

p"i'ate "e!pondent.58

=I? Othe" ci"c%m!tance!59 !%ch a! =a? hen "ein!tatement i! inimical to the

employe"$! inte"e!t;60 =b? "ein!tatement doe! not !e"'e the be!t inte"e!t! of the

pa"tie! in'ol'ed;61 =c? the employe" i! p"e3%diced by the o"e"!$ contin%ed

employment;62 o" =d? that it ill not !e"'e any p"%dent p%"po!e a! hen

!%pe"'ening fact! t"an!pi"ed hich made e#ec%tion %n3%!t o" ine%itable.63

/. )O0PO*E*TS OF SEP2R2T,O* P21 ,* L,EU OF RE,*ST2TE0E*T PER PRE@2,L,*

KUR,SPRUDE*)E.

The aount of separation pay that should be paid in lieu of reinstateent

is not provided under the Labor Code. urisprudence, however, dictates that the

followin* should be included in its coputation:

=1? The amo%nt e%i'alent to at lea!t one =1? month !ala"y o" to one =1? month !ala"y

fo" e'e"y yea" of !e"'ice& hiche'e" i! highe"& a f"action of at lea!t !i# =I? month!

being con!ide"ed a! one =1? hole yea".64

=(? 2lloance! that the employee ha! been "ecei'ing on a "eg%la" ba!i!.65

9. PER,OD )O@ERED.

a. F"om !ta"t of employment %p to the date of 5nality of deci!ion.

Sepa"ation pay in lie% of "ein!tatement i! comp%ted f"om the commencement of

employment %p to the time of te"mination& incl%ding the imp%ted !e"'ice fo" hich the

employee i! entitled to bacage!.

66 0o"e de5niti'ely& it !ho%ld be "econed f"om the

5"!t day of employment%ntil the 5nality of the deci!ion.

67

b. :hen employe" ha! al"eady cea!ed it! ope"ation!.

:hen employe" ha! cea!ed it! b%!ine!! ope"ation!& the !epa"ation pay in lie% of

"ein!tatement !ho%ld be comp%ted only %p to that date of clo!%"e.68

A. S2L2R1 R2TE TO HE USED ,* T+E )O0PUT2T,O*.

The !ala"y "ate p"e'ailing at the end of the eriod of utati&e ser&ice !ho%ld be the

ba!i! fo" comp%tation hich "efe"! to the pe"iod of imp%ted !e"'ice fo" hich the

employee i! entitled to bacage!.

69

I. SO0E PR,*),PLES O* SEP2R2T,O* P21 ,* L,EU OF RE,*ST2TE0E*T.

2a"d of !epa"ation pay in lie% of "ein!tatement i! not p"ope" if the"e i! no 5nding of

illegality of di!mi!!al. Thi! i! !o beca%!e the p"incipal "emedy of "ein!tatement may only

be g"anted in ca!e the di!mi!!al i! illegal.70

Sepa"ation pay& a! a !%b!tit%te "emedy& i! only p"ope" fo" "ein!tatement b%t not fo"

bacage!.71










































Sepa"ation pay and bacage! a"e not incon!i!tent ith each othe". +ence& both may

be aa"ded to an illegally di!mi!!ed employee.72 The payment of !epa"ation pay i! in

addition to payment of bacage!.73

Employe" doe! not ha'e the option to choo!e beteen act%al "ein!tatement and

!epa"ation pay in lie% the"eof. 2ct%al "ein!tatement ha! the p"imacy a! the p"ope" "elief

to hich an illegally di!mi!!ed employee i! entitled. Payment of !epa"ation pay !ho%ld

be o"de"ed only in the e'ent that the"e i! a !hoing that "ein!tatement i! no longe"

po!!ible by "ea!on of the 3%!ti5cation! alloed %nde" e!tabli!hed 3%"i!p"%dence.74

Rein!tatement cannot be g"anted hen hat i! p"ayed fo" by employee i! !epa"ation

pay in lie% the"eof.75

"ant of !epa"ation pay in lie% of "ein!tatement con'e"t! the aa"d of "ein!tatement

into a moneta"y aa"d; hence& legal inte"e!t may be impo!ed the"eon.76

STR2,*ED REL2T,O*S RULE

. STR2,*ED REL2T,O*S OR 2*T2O*,S0 021 EFFE)T,@EL1 H2R RE,*ST2TE0E*T.

The doct"ine of 6strained relations7 o" 6antiathy and antagonism7 o" 6irretrie&able

estrangement 7 applie! hen "ein!tatement ill no longe" be in the be!t inte"e!t of both the

employee and the employe" con!ide"ing the animo!ity and antagoni!m that e#i!t beteen

them b"o%ght abo%t by the 5ling of the labo" ca!e. 77

+oe'e"& acco"ding to the (C1/ ca!e of Leopa"d Sec%"ity and ,n'e!tigation

2gency '. %itoy&

78 !tanding alone& the doct"ine of !t"ained "elation! ill not 3%!tify an

aa"d of !epa"ation pay& a "elief g"anted in in!tance! he"e the common denominato" i! the

fact that the employeewas dismissed by the employe". E'en in ca!e! of illegal di!mi!!al&

thedoct"ine of !t"ained "elation! i! not applied indi!c"iminately a! to ba" "ein!tatement&

e!pecially hen the employee ha! not indicated an a'e"!ion to "et%"ning to o" o" doe!

not occ%py a po!ition of t"%!t and con5dence o" ha! no !ay in the ope"ation of the

employe"$! b%!ine!!. 2ltho%gh litigation may al!o engende" a ce"tain deg"ee of ho!tility& it

ha! liei!e been "%led that the %nde"!tandable !t"ain in the pa"tie!$ "elation! o%ld not

nece!!a"ily "%le o%t "ein!tatement hich o%ld& othe"i!e& become the "%le "athe" than the

e#ception in illegal di!mi!!al ca!e!.79

,n a pletho"a of ca!e!& the S%p"eme )o%"t ha! been con!i!tent in it! holding that the

e#i!tence of !t"ained "elation! beteen the employe" and the illegally di!mi!!ed employee

may e8ecti'ely ba" "ein!tatement of the latte".80

(. SO0E PR,*),PLES O* STR2,*ED REL2T,O*S.

St"ained "elation! m%!t be p"o'ed and demon!t"ated a! a fact.81

Litigation& by it!elf& doe! not gi'e "i!e to !t"ained "elation! that may 3%!tify non-

"ein!tatement. The 5ling of the complaint fo" illegal di!mi!!al doe! not by it!elf 3%!tify the

in'ocation of the doct"ine of !t"ained "elation!. 82

*o !t"ained "elation! !ho%ld a"i!e f"om a 'alid and legal act of a!!e"ting one$! "ight;

othe"i!e& an employee ho a!!e"t! hi! "ight co%ld be ea!ily !epa"ated f"om the !e"'ice

by me"ely paying hi! !epa"ation pay on the p"ete#t that hi! "elation!hip ith hi!

employe" had al"eady become !t"ained.83

,ndeed& if the !t"ained "elation! engende"ed a! a "e!%lt of litigation a"e !%Jcient to "%le

o%t "ein!tatement& then "ein!tatement o%ld become the e#ception "athe" than the "%le

in ca!e! of illegal di!mi!!al.84
































he nat%"e of po!ition i! mate"ial in dete"mining the 'alidity of 6!t"ained

"elation!.7 ,f the nat%"e of the po!ition "e%i"e! that t"%!t and con5dence be "epo!ed

by the employe" %pon the employee occ%pying it a! o%ld mae "ein!tatement

ad'e"!ely a8ect the eJciency& p"od%cti'ity and pe"fo"mance of the latte"& !t"ained

"elation! may be in'oed in o"de" to 3%!tify non-"ein!tatement. :he"e the employee&

hoe'e"& ha! no !ay in the ope"ation of hi! employe"$! b%!ine!!& in'ocation of thi!doct"ine i! not p"ope".85

*on-!ettlement of di!p%te afte" long pe"iod of time i! not indicati'e of !t"ained

"elation!.86

The "ef%!al of an employee to be "ein!tated i! indicati'e of !t"ained "elation!. 87

)"iminal p"o!ec%tion con5"m! the e#i!tence of 6!t"ained "elation!7 hich o%ld "ende"

the employee$! "ein!tatement highly %nde!i"able.88

2 manage"ial employee !ho%ld not be "ein!tated if !t"ained "elation! e#i!t.

89

,n ca!e of ne one"!hip of the e!tabli!hment& "ein!tatement i! p"ope" if no !t"ained

"elation! e#i!t ith ne one".90

2.

A!K@A3E91

. )O*)EPT.

Unde" 2"ticle (G& an employee ho i! %n3%!tly di!mi!!ed i! entitled not only to

"ein!tatement& itho%t lo!! of !enio"ity "ight! and othe" p"i'ilege!& b%t al!o to the payment

of hi! f%ll bacage!& incl%!i'e of alloance! and othe" bene5t! o" thei" moneta"y

e%i'alent& comp%ted f"om the time hi! compen!ation a! ithheld f"om him =hich& a! a

"%le& i! f"om the time of hi! illegal di!mi!!al? %p to the time of hi! act%al "ein!tatement.92

The raison d? etre fo" the payment of bacage! i! e%ity. Hacage! "ep"e!ent

compen!ation that !ho%ld ha'e been ea"ned by the employee b%t e"e lo!t beca%!e of the

%n3%!t o" illegal di!mi!!al.93

Simply !tated& an employee ho!e di!mi!!al i! fo%nd to be illegal i! con!ide"ed not

to ha'e left hi! oJce !o that he i! entitled to all the "ight! and p"i'ilege! that acc"%e to him

by 'i"t%e of the oJce that he held.94

H%t if the di!mi!!al i! not illegal& an aa"d of bacage! i! not p"ope".95

(. T+E HUST202*TE DO)TR,*E.

,n 1GGI& the S%p"eme )o%"t changed the "%le96 on the "econing of bacage!. ,t

anno%nced a ne doct"ine in the ca!e of H%!tamante '. *LR)&

97 hich i! no non a!

the >ustamante doct"ine" Unde" thi! "%le& the te"m 6f%ll bacage!7 !ho%ld mean e#actly

that& i"e" & itho%t ded%cting f"om bacage! the ea"ning! de"i'ed el!ehe"e by the

conce"ned employee d%"ing the pe"iod of hi! illegal di!mi!!al.98

<a7

!*P4A0*+

. )O0PO*E*TS.

The component! of bacage! a"e a! follo!<



































1. Sala"ie! o" age! comp%ted on the ba!i! of the age "ate le'el at the time of the

illegal di!mi!!al and not in acco"dance ith the late!t& c%""ent age le'el of the

employee$! po!ition.99

(. 2lloance! and othe" bene5t! "eg%la"ly g"anted to and "ecei'ed by the employee

!ho%ld be made pa"t of bacage!.100 :xamlesG

a. Eme"gency li'ing alloance! and 1/thmonth pay mandated %nde" the la.101

b. F"inge bene5t! o" thei" moneta"y e%i'alent.102

c. T"an!po"tation and eme"gency alloance!.103

d. +oliday pay& 'acation and !ic lea'e! and !e"'ice incenti'e lea'e!.104

e. K%!t !ha"e in the !e"'ice cha"ge!.105

f. a!oline& ca" and "ep"e!entation alloance!.106

g. 2ny othe" "eg%la" alloance! and bene5t! o" thei" moneta"y e%i'alent. 107

(. SO0E PR,*),PLES O* H2):2ES.

The comp%tation of !aid "eg%la"ly paid alloance! and bene5t! a! pa"t of bacage!

!ho%ld be made %p to the date of "ein!tatement a! p"o'ided %nde" 2"ticle (G of theLabo" )ode o"& if "ein!tatement be not po!!ible& %p to the 5nality of the deci!ion

g"anting f%ll bacage!.108

Sala"y inc"ea!e! d%"ing pe"iod of %nemployment a"e not incl%ded a! component in the

comp%tation of bacage!.109

Di!mi!!ed employee$! ability to ea"n i! i""ele'ant in the aa"d of bacage!. 110

The fail%"e to claim bacage! in a complaint fo" illegal di!mi!!al i! a me"e p"oced%"al

lap!e hich cannot defeat a "ight g"anted %nde" !%b!tanti'e la. +ence& the illegally

di!mi!!ed employee may !till be aa"ded bacage! de!pite !aid fail%"e. 111

:hen Labo" 2"bite" o" *LR) failed to aa"d any bacage!& the !ame may be co""ectedon appeal e'en if o"e" did not appeal.112

n ca!e "ein!tatement i! o"de"ed& f%ll bacage! !ho%ld be "econed f"om the time

the compen!ation a! ithheld =hich& a! a "%le& i! f"om the time of illegal di!mi!!al? %p

to the time of "ein!tatement& hethe" act%al o" in the pay"oll . 113

f !epa"ation pay i! o"de"ed in lie% of "ein!tatement& f%ll bacage! !ho%ld be

comp%ted f"om the time of illegal di!mi!!al %ntil the 5nalityof the deci!ion. The

3%!ti5cation i! that along ith the 5nality of the S%p"eme )o%"t$! deci!ion& the i!!%e on

the illegality of the di!mi!!al i! 5nally laid to "e!t.114

he "%le i! di8e"ent if employment i! fo" a de5nite pe"iod . The illegally di!mi!!ed

5#ed-te"m employee i! entitled only to the payment of hi! !ala"ie! co""e!ponding tothe unexired po"tion of hi! 5#ed-te"m employment cont"act.115

,f the illegally di!mi!!ed employee ha! "eached the optional "eti"ement age of IC yea"!&

hi! bacage! !ho%ld only co'e" the time hen he a! illegally di!mi!!ed %p to the time

hen he "eached IC yea"!. Unde" 2"ticle (B& IC yea"! i! the optional "eti"ement age.116

,f the employee ha! "eached IA yea"! of age o" beyond& hi! f%ll bacage! !ho%ld be

comp%ted only %p to !aid age. The contention of the employe" that bacage! !ho%ld

be "econed only %p to age IC cannot be !%!tained.117 ,n Kac%lbe '. Silliman

Uni'e"!ity&

118 it a! decla"ed that !ince petitione" ha! al"eady "eached !e'enty-one =1?

yea"! of age at the time the deci!ion a! "ende"ed by the S%p"eme )o%"t in thi! ca!e&

the aa"d of bacage! in he" fa'o" m%!t be comp%ted f"om the time of he" illegaldi!mi!!al %p to he" comp%l!o"y "eti"ement age of !i#ty-5'e =IA? .119



















































,f te"mination a! made e8ecti'e immediately& the bacage! !ho%ld be "econed f"om

the date of the te"mination lette" he"e !%ch a! !tated.120

,f employe" ha! al"eady cea!ed ope"ation!& f%ll bacage! !ho%ld be comp%ted only %p

to the date of the clo!%"e. To allo the comp%tation of the bacage! to be ba!ed on a

pe"iod beyond that o%ld be an in3%!tice to the employe".121

,f 'alid "et"enchment !%pe"'ened d%"ing the pendency of the ca!e& f%ll bacage!

!ho%ld be comp%ted only %p to the e8ecti'ity date of the "et"enchment.122

,n ca!e the employee die! d%"ing pendency of the ca!e& hi! f%ll bacage! !ho%ld be

comp%ted f"om the time of hi! di!mi!!al %p to the time of hi! death. 123

The pe"iod of 'alid !%!pen!ion i! ded%ctible f"om bacage!. 124

Hacage! !ho%ld be "econed f"om end of 'alid !%!pen!ion.125

Hacage! !ho%ld incl%de pe"iod of p"e'enti'e !%!pen!ion.126

Employe"$! o8e" to "ein!tate doe! not fo"e!tall payment of f%ll bacage!. 127

2ny amo%nt "ecei'ed d%"ing pay"oll "ein!tatement i! ded%ctible f"om bacage!.128

<b7

(00E) A!K@A3E

. @2R,2T,O*S ,* T+E R2*T OF H2):2ES.

The di!c%!!ion abo'e dell! on ca!e! he"e bacage! a"e g"anted in f%ll in

acco"dance ith the clea" mandate of 2"ticle (G of the Labo" )ode. +oe'e"& in ce"tain

in!tance!& bacage! a"e not g"anted at all o" a"e g"anted b%t only fo" a limited amo%nt.

The di!c%!!ion belo ill point o%t the 'a"iation! in the g"ant of bacage! a!

follo!<

=a? :hen "ein!tatement i! g"anted itho%t bacage!; o"

=b? :hen "ein!tatement i! g"anted ith limited bacage!.

(. RE,*ST2TE0E*T H.84)I8 >#C;H#3:S"

Unde" the folloing !it%ation!& "ein!tatement of an illegally di!mi!!ed employee i!

g"anted itho%t the accompanying bacage!<

=1? :hen the di!mi!!al i! deemed too ha"!h a penalty ;

=(? :hen the employe" acted in good faith; o"

=/? :he"e the"e i! no e'idence that the employe" di!mi!!ed the employee.

ll%!t"ati'e ca!e! of the E.RS8 !it%ation abo'e<

=1? 2!!ociated Labo" Union!-TU)P '. *LR)&

129 he"e "ein!tatement ith no

bacage! a! o"de"ed beca%!e the penalty of di!mi!!al impo!ed on the employee fo"

committing theft of company p"ope"ty a! "ed%ced to !%!pen!ion d%e to mitigating

ci"c%m!tance!. The 3%!ti5cation a! that the enti"e pe"iod hen the employee a! o%t of

3ob beca%!e of hi! di!mi!!al !ho%ld al"eady be con!ide"ed a! the pe"iod of hi! !%!pen!ion;

hence& he !ho%ld no longe" be entitled to bacage! fo" the !ame pe"iod.

=(? 1%pangco )otton 0ill!& ,nc. '. *LR)&

130 he"e& afte" 5nding that the employee

a! illegally di!mi!!ed b%t at the !ame time g%ilty of mi!cond%ct& it a! "%led that the"e a!


























no g"a'e ab%!e of di!c"etion in the "e!ol%tion of the *LR) hich meted only the penalty of

!%!pen!ion itho%t bacage!.

=/? Pep!i-)ola Di!t"ib%to"! of the Philippine!& ,nc. '. *LR)&

131 he"e the

employee 5led a lea'e of ab!ence fo" one day afte" he !%8e"ed !tomach ache and %pon the

ad'ice of hi! docto"& he too a "e!t fo" (A day! itho%t p"io" lea'e. :hen he "epo"ted bac

fo" o"& he a! told that he had been di!mi!!ed fo" being ab!ent itho%t lea'e. ,t a! heldthat hile he a! at fa%lt& the employee co%ld not be di!mi!!ed. +e a! o"de"ed "ein!tated

b%t he a! denied bacage!.

ll%!t"ati'e ca!e! of the S:C)'( !it%ation abo'e<

=1? ,n ,togon-S%yoc 0ine!& ,nc. '. *ational Labo" Relation! )ommi!!ion&

132 the

employee a! fo%nd g%ilty of b"each of t"%!t fo" !tealing o"e ith high gold content.

+oe'e"& hi! di!mi!!al a! con!ide"ed d"a!tic and %na""anted con!ide"ing that he had

"ende"ed tenty th"ee =(/? yea"! of !e"'ice itho%t p"e'io%! de"ogato"y "eco"d and he a!

p"emat%"ely !%!pended d%"ing the pendency of the ca!e. )on!e%ently& he a! o"de"ed

"ein!tated b%t itho%t g"anting him any bacage!. The +igh )o%"t p"ono%nced that 6the

end! of !ocial andcompa!!ionate 3%!tice o%ld the"efo"e be !e"'ed if p"i'ate "e!pondent i!"ein!tated b%t itho%t bacage! in 'ie of petitione"! good faith.7

=(? Finding fact%al !imila"ity ith the fo"egoing ca!e of .togon-Suyoc & the S%p"eme

)o%"t& in the (C1/ ca!e of Pep!i-)ola P"od%ct! Philippine!& ,nc. '. 0olon&

133 deem! it

app"op"iate to "ende" the !ame di!po!ition in!ofa" a! one of the "e!pondent! in thi! ca!e

a! conce"ned - Sa%nde" Santiago Remandaban ,,,. Thi! ca!e in'ol'e! a !t"ie hich the

DOLE Sec"eta"y ce"ti5ed to the *LR) fo" comp%l!o"y a"bit"ation. 2 "et%"n-to-o" o"de" a!

i!!%ed a! a con!e%ence of !%ch ce"ti5cation. +oe'e"& Remandaban failed to "epo"t fo"

o" ithin tenty-fo%" =(9? ho%"! f"om "eceipt of the !aid o"de". Heca%!e of thi!& he a!

!e"'ed ith a notice of lo!! of employment !tat%! =dated K%ly /C& 1GGG? hich he challenged&

a!!e"ting that hi! ab!ence on that day a! 3%!ti5ed beca%!e he had to con!%lt a phy!ician

"ega"ding the pe"!i!tent and e#c"%ciating pain of the inne" !ide of hi! "ight foot. ,n o"de"ing

hi! "ein!tatement b%t itho%t bacage!& the S%p"eme )o%"t cited the folloing a! it!

ba!e!<

=a? :hile Remandaban a! "emi!! in p"ope"ly info"ming Pep!i of hi! intended

ab!ence& the penalty of di!mi!!al i! too ha"!h fo" hi! inf"action! con!ide"ing that

hi! fail%"e to "epo"t to o" a! clea"ly p"ompted by a medical eme"gency and

not by any intention to defy the K%ly (& 1GGG "et%"n-to-o" o"de".

=b? Pep!i! good faith i! !%ppo"ted by the *LR)! 5nding that

6the "et%"n-to-o" o"de" of the Sec"eta"y a! taen lightly by Remandaban. 7 ,n

thi! "ega"d& con!ide"ing Remandaban! o!ten!ible de"eliction of the !aid o"de"&

Pep!i co%ld not be blamed fo" !ending him a notice of te"mination and e'ent%allyp"oceeding to di!mi!! him.

=/? ,t a! liei!e held in the (C1/ ca!e of ,nteg"ated 0ic"oelect"onic!& ,nc. '.

Pionella&

134 on motion fo" "econ!ide"ation by petitione"& that the bacage!135 !ho%ld be

deleted on the g"o%nd! that =a? the penalty of di!mi!!al a! too ha"!h of a penalty to be

impo!ed again!t Pionilla fo" hi! inf"action!;136 and =b? petitione" ,0, a! in good faith hen it

di!mi!!ed Pionilla a! hi! de"eliction of it! policy on ,D %!age a! hone!tly pe"cei'ed to be a

th"eat to the company$! !ec%"ity. ,n thi! "e!pect& !ince the!e conc%""ing ci"c%m!tance!

t"igge" the application of the e#ception to the "%le on bacage! a! en%nciated in the

abo'e-cited ca!e!& the )o%"t fo%nd it p"ope" to acco"d the !ame di!po!ition and

con!e%ently di"ected the deletion of the aa"d of bacage! in fa'o" of Pionilla&

notith!tanding the illegality of hi! di!mi!!al.

















ll%!t"ati'e ca!e! of the 84.R( !it%ation abo'e<

=1? ,n the (C1( ca!e of He!t :ea" a"ment! '. De Lemo!&

137 he"e the "eco"d!

a"e be"eft of any !hoing of clea" di!c"imination& in!en!ibility o" di!dain on the pa"t of

petitione"! in t"an!fe""ing "e!pondent! M both !ee"! on piece-"ate ba!i! - to pe"fo"m a

di8e"ent type of !eing 3ob hich o%ld amo%nt to con!t"%cti'e di!mi!!al. That "e!pondent!

e'ent%ally di!contin%ed "epo"ting fo" o" afte" thei" plea to be "et%"ned to thei" fo"me"

o" a!!ignment! a! thei" pe"!onal deci!ion& fo" hich the petitione"! !ho%ld not be held

liable pa"tic%la"ly a! the latte" did not& in fact& di!mi!! them. ,ndeed& the"e a! no e'idence

that "e!pondent! e"e di!mi!!ed f"om employment. ,n fact& petitione"! e#p"e!!ed

illingne!! to accept them bac to o". The"e being no te"mination of employment by the

employe"& the aa"d of bacage! cannot be !%!tained. ,t i! ell !ettled that bacage! may

be g"anted only hen the"e i! a 5nding of illegal di!mi!!al. ,n ca!e! he"e the"e i! no

e'idence of di!mi!!al& the "emedy i! "ein!tatement b%t itho%t bacage!.

=(? ,n the (C1/ ca!e of Leopa"d Sec%"ity and ,n'e!tigation 2gency '.

%itoy&

138 a! ell a! in the ea"lie" ca!e of Sec%"ity and )"edit ,n'e!tigation& ,nc. '.

*LR)&

139

"ein!tatement itho%t bacage! a! o"de"ed beca%!e petitione"! e"e fo%ndnot to ha'e di!mi!!ed "e!pondent! =!ec%"ity g%a"d!? and that the latte"& fo" thei" pa"t& ha'e

not abandoned thei" employment.140

=/? Leona"do ' . *LR)

141 he"e the S%p"eme )o%"t o"de"ed the "ein!tatement !an!

bacage! of the employee =F%e"te? ho a! decla"ed neithe" to ha'e abandoned hi! 3ob

no" a! he con!t"%cti'ely di!mi!!ed. 2! pointed o%t by the )o%"t& in a ca!e he"e the

employee$! fail%"e to o" a! occa!ioned neithe" by hi! abandonment no" by a

te"mination& the b%"den of economic lo!! i! not "ightf%lly !hifted to the employe". Each pa"ty

m%!t bea" hi! on lo!!.

/. RE,*ST2TE0E*T :,T+ L,0,TED H2):2ES.

:hile in the afo"ementioned ca!e! of illegal di!mi!!al& the S%p"eme )o%"t o"de"edthe employee!$ "ein!tatement b%t itho%t bacage!& the"e a"e al!o in!tance! he"e the

bacage! e"e not gi'en in f%ll b%t me"ely limited fo" the !ame "ea!on of good faith on

the pa"t of the employe".

ll%!t"ati'e ca!e! he"e aa"d of bacage! a! limited to yea"<

=a? ,n San 0ig%el )o"po"ation '. Ka'ate& K". &

142 the +igh )o%"t aJ"med the

con!i!tent 5nding! and concl%!ion! of the Labo" 2"bite"& the *LR)& and the )o%"t of 2ppeal!

that the employee a! illegally di!mi!!ed !ince he a! !till 5t to "e!%me hi! o"; b%t the

employe"$! liability a! mitigated by it! e'ident good faith in te"minating the employee$!

!e"'ice! ba!ed on the te"m! of it! +ealth& :elfa"e and Reti"ement Plan. +ence& the

employee a! o"de"ed "ein!tated to hi! fo"me" po!ition itho%t lo!! of !enio"ity and othe"

p"i'ilege! appe"taining to him p"io" to hi! di!mi!!al& b%t the aa"d of bacage! a!limited

to only one =1? yea" con!ide"ing the mitigating ci"c%m!tance of good faith att"ib%ted to the

employe".

(b) +n P$+)#($ % G%;( P&&&(" '. B+("#+143 the -upree

Court, while aDrin* the ille*ality of the disissal of the eployee, did not *rant

hi full bac0wa*es. +t a*reed with the 9ndin*s of the EL5C and the Court of

ppeals that in view of the eployee8s absences that were not wholly 3usti9ed, he

should be entitled to bac0wa*es liited to one (1) year only.144

ll%!t"ati'e ca!e he"e aa"d of bacage! a! limited to ( yea"!<

,n Dolo"e! '. *LR)&

145 the employee a! te"minated fo" he" contin%o%! ab!ence

itho%t pe"mi!!ion. 2ltho%gh it a! fo%nd that the employee a! indeed g%ilty of b"each of




























t"%!t and 'iolation of company "%le!& the +igh )o%"t !till decla"ed the employee$! di!mi!!al

illegal a! it a! too !e'e"e a penalty con!ide"ing that !he had !e"'ed the employe" company

fo" (1 yea"!& it a! he" 5"!t o8en!e& and he" lea'e to !t%dy the F"ench lang%age o%ld

%ltimately bene5t the employe" ho no longe" had to !pend fo" t"an!lation !e"'ice!. E'en

!o& othe" than o"de"ing the employee$! "ein!tatement& the !aid employee a!

aa"ded bacage! limited to a pe"iod of to =(? yea"!& gi'en that the employe" acteditho%t malice o" bad faithin te"minating the employee$! !e"'ice!.

ll%!t"ati'e ca!e he"e aa"d of bacage! a! limited to A yea"!<

,n it! "e!ol%tion on the motion fo" "econ!ide"ation 5led by the petitione" in @icto"y

Line"& ,nc. '. Race&

146 the +igh T"ib%nal "ed%ced and limited the o"iginal aa"d of f%ll

bacage! to 5'e =A? yea"! in the light of the e'ident good faith of the employe". :hile

petitione"$! a"g%ment that "e!pondent had al"eady abandoned hi! 3ob in 1GG9 a! not

%pheld& the )o%"t conceded that petitione"& gi'en the pa"tic%la" ci"c%m!tance! of thi! ca!e&

had !%Jcient ba!i! to "ea!onably and in good faith deem "e!pondent "e!igned by 1GGB.

------------oOo------------

Chapter Four


OPICS PER SYLLABUS

). Preentie uspension

).

PREBE+0BE 4PE+0*+1

. LE2L H2S,S.

The Labo" )ode doe! not contain any p"o'i!ion on p"e'enti'e !%!pen!ion. The legal

ba!i! fo" the 'alid impo!ition the"eof i! fo%nd in Section! B and G& R%le ;;,,,& Hoo @ of

the R%le! to ,mplement the Labo" )ode .2

(. PURPOSE 2*D KUST,F,)2T,O*.

P"e'enti'e !%!pen!ion may be legally impo!ed again!t an e""ant employee only

hen hi! alleged 'iolation i! the !%b3ect of an in'e!tigation. Thi! "emedy may th%! be

"e!o"ted to only hile the e""ant employee i! %nde"going an in'e!tigation fo"

ce"tain !e"io%! o8en!e!. )on!e%ently& it! p%"po!e i! to p"e'ent him f"om ca%!ing ha"m o"

in3%"y to the company a! ell a! to hi! fello employee!. ,t i! 3%!ti5ed only in ca!e! he"e theemployee$! contin%ed p"e!ence in the company p"emi!e! d%"ing the in'e!tigation po!e! a

!e"io%! and imminent th"eat to the life o" p"ope"ty of the employe" o" of the employee$! co-

o"e"!. :itho%t thi! th"eat& p"e'enti'e !%!pen!ion i! not p"ope".3

/. SO0E PR,*),PLES O* PRE@E*T,@E SUSPE*S,O*.

2n employe" ha! the "ight to p"e'enti'ely !%!pend the employee d%"ing the pendency

of the admini!t"ati'e ca!e again!t him a! a mea!%"e of !elf-p"otection.4

,f the ba!i! of the p"e'enti'e !%!pen!ion i! the employee$! ab!ence! and ta"dine!!& the

impo!ition of p"e'enti'e !%!pen!ion on him i! not 3%!ti5ed a! hi! p"e!ence in the

company p"emi!e! doe! not po!e any !%ch !e"io%! o" imminent th"eat to the life o"


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p"ope"ty of the employe" o" of the employee$! co-o"e"! !imply 6by inc%""ing "epeated

ab!ence! and ta"dine!!.7 5

The g"o%nd! of 'iolation of the !chool "%le! and "eg%lation! on the ea"ing of %nifo"m&

ta"dine!! o" ab!ence& and malicio%!ly !p"eading fal!e acc%!ation! again!t the !chool& do

not 3%!tify the impo!ition of p"e'enti'e !%!pen!ion.6

The fail%"e by an employee to attend a meeting called by hi! !%pe"'i!o" ill not 3%!tify

hi! p"e'enti'e !%!pen!ion.7

P"e'enti'e !%!pen!ion doe! not mean that d%e p"oce!! may be di!"ega"ded.8

P"e'enti'e !%!pen!ion i! not a penalty.9 P"e'enti'e !%!pen!ion& by it!elf& doe! not

!ignify that the company ha! al"eady ad3%dged the employee g%ilty of the cha"ge! fo"

hich !he a! a!ed to an!e" and e#plain.10

P"e'enti'e !%!pen!ion i! neithe" e%i'alent no" tantamo%nt to di!mi!!al. 11

P"e'enti'e !%!pen!ion !ho%ld only be fo" a ma#im%m pe"iod of thi"ty =/C? day!. 2fte"

the lap!e of the /C-day pe"iod& the employe" i! "e%i"ed to "ein!tate the o"e" to hi!fo"me" po!ition o" to a !%b!tantially e%i'alent po!ition.

D%"ing the /C-day p"e'enti'e !%!pen!ion& the o"e" i! not entitled to hi! age! and

othe" bene5t!. +oe'e"& if the employe" decide!& fo" a 3%!ti5able "ea!on& to e#tend the

pe"iod of p"e'enti'e !%!pen!ion beyond !aid /C-day pe"iod& he i! obligated to pay the

age! and othe" bene5t! d%e the o"e" d%"ing !aid pe"iod of e#ten!ion. ,n !%ch a ca!e&

the o"e" i! not bo%nd to "eimb%"!e the amo%nt paid to him d%"ing the e#ten!ion if

the employe" decide! to di!mi!! him afte" the completion of the in'e!tigation.12

E#ten!ion of pe"iod m%!t be 3%!ti5ed. D%"ing the /C-day pe"iod of p"e'enti'e

!%!pen!ion& the employe" i! e#pected to cond%ct and 5ni!h the in'e!tigation of the

employee$! admini!t"ati'e ca!e. The pe"iod of thi"ty =/C? day! may only be e#tended if the employe" failed to complete the hea"ing o" in'e!tigation ithin !aid pe"iod d%e to

3%!ti5able g"o%nd!. *o e#ten!ion the"eof can be made ba!ed on him!ical& cap"icio%! o"

%n"ea!onable g"o%nd!.13

P"e'enti'e !%!pen!ion la!ting longe" than /C day!& itho%t the bene5t of 'alid

e#ten!ion& amo%nt! to con!t"%cti'e di!mi!!al.14

,nde5nite p"e'enti'e !%!pen!ion amo%nt! to con!t"%cti'e di!mi!!al. 15

Fail%"e to !tate the d%"ation of the p"e'enti'e !%!pen!ion in the notice doe! not mean

it i! inde5nite. The"e i! a "ea!onable and logical p"e!%mption that !aid !%!pen!ion in fact

ha! a d%"ation hich co%ld 'e"y ell be not mo"e than /C day! a! mandated by la. 16

Sala"ie! !ho%ld be paid fo" imp"ope"ly-impo!ed p"e'enti'e !%!pen!ion. 17

Pe"iod of p"e'enti'e !%!pen!ion of o"e"! in the con!t"%ction ind%!t"y i! only fo" A

day!.18

P"e'enti'e !%!pen!ion i! di8e"ent f"om !%!pen!ion of ope"ation %nde" 2"ticle (BI19 of

the Labo" )ode.20

P"e'enti'e !%!pen!ion i! di8e"ent f"om 6Woating !tat%!.7 21

------------oOo------------

Chapter Four











































OPICS PER SYLLABUS

E. !onstructie )ismissal

E.

!*+R4!0BE )00A(1

. )O*STRU)T,@E D,S0,SS2L.

)on!t"%cti'e di!mi!!al contemplate! any of the folloing !it%ation!<

1? 2n in'ol%nta"y "e!ignation "e!o"ted to hen contin%ed employment i!

"ende"ed impo!!ible& %n"ea!onable o" %nliely;

(? 2 demotion in "an and>o" a dimin%tion in pay; o"

/? 2 clea" di!c"imination& in!en!ibility o" di!dain by an employe" hich become!

%nbea"able to the employee that it co%ld fo"eclo!e any choice by him e#cept to

fo"ego hi! contin%ed employment.2

(. ,*@OLU*T2R1 RES,*2T,O*.

The te"mination initiated by the employee ba!ed on the 3%!t ca%!e! de!c"ibed and

en%me"ated in 2"ticle (BA3 of the Labo" )ode i! in the nat%"e of in'ol%nta"y "e!ignation.

Th%!& an employee may p%t an end to the employment "elation!hip itho%t need of !e"'ing

any notice on the employe" fo" any of the folloing 3%!t ca%!e!<

=1? Se"io%! in!%lt by the employe" o" hi! "ep"e!entati'e on the hono" and pe"!on of

the employee;

=(? ,nh%mane and %nbea"able t"eatment acco"ded the employee by the employe" o"

hi! "ep"e!entati'e;

=/? )ommi!!ion of a c"ime o" o8en!e by the employe" o" hi! "ep"e!entati'e again!t

the pe"!on of the employee o" any of the immediate membe"! of hi! family; and

=9? Othe" ca%!e! analogo%! to any of the fo"egoing.4

Th%!& %nlie "e!ignation without 3%!t ca%!e %nde" the !ame 2"ticle (BA5 he"e the

la "e%i"e! p"io" "itten notice& the employee may te"minate hi! employment itho%t

!e"'ing any notice to the employe" if !%ch i! occa!ioned by any of the 3%!t ca%!e! mentioned

abo'e.

/. FOR)ED RES,*2T,O*.

The"e i! fo"ced "e!ignation he"e the employee i! made to do o" pe"fo"m an

in'ol%nta"y act - !%bmi!!ion o" tende" of "e!ignation - meant to 'alidate the action of management in in'eigling& l%"ing o" inW%encing o" p"actically fo"cing the employee to

e8ect%ate the te"mination of employment& in!tead of doing the te"mination him!elf.6

9. )O00O* DE*O0,*2TOR.

Hoth in'ol%nta"y and fo"ced "e!ignation! a"e emb"aced ithin the concept of

con!t"%cti'e di!mi!!al. The common cha"acte" pe"'ading in'ol%nta"y o" fo"ced "e!ignation

o" con!t"%cti'e di!mi!!al i! the act of “=uitting” f"om employment by the employee beca%!e

of the attendant 3%!t ca%!e!& act!& fact! o" ci"c%m!tance! hich "ende" the contin%ed

employment impo!!ible& %n"ea!onable o" %nliely.7 Th%!& if the"e i! no ce!!ation of

o"& the"e can be no con!t"%cti'e di!mi!!al.8

A. TEST OF )O*STRU)T,@E D,S0,SS2L.

http://www.chanroblesbar.com.ph/index.php/lecture-materials/labor-law/2242-bar-subjects/labor-law/labor-law--prof-joselito-guianan-chan/2014-bar-exam-notes-on-labor-law-based-on-the-supreme-court-prescribed-syllabus-by-prof-joselito-guianan-chan/chapter-four-termination-of-employment-prof-joselito-guianan-chan/84761-e-constructive-dismissal#_ftn1





















The te!t of con!t"%cti'e di!mi!!al i! hethe" a "ea!onable pe"!on in the employee$!

po!ition o%ld ha'e felt compelled to gi'e %p hi! po!ition %nde" the ci"c%m!tance!. ,t i! an

act amo%nting to di!mi!!al b%t made to appea" a! if it e"e not. ,n fact& the employee ho

i! con!t"%cti'ely di!mi!!ed may be alloed to eep on coming to o". )on!t"%cti'e

di!mi!!al i!& the"efo"e& a di!mi!!al in di!g%i!e .9 The la "ecogni4e! and "e!ol'e! thi!

!it%ation in fa'o" of the employee! in o"de" to p"otect thei" "ight! and inte"e!t! f"om thecoe"ci'e act! of the employe".10

I. @OLU*T2R1 RES,*2T,O* @S. )O*STRU)T,@E D,S0,SS2L.

@ol%nta"y "e!ignation i! liei!e di!tinct f"om con!t"%cti'e di!mi!!al. Fo" in!tance& it

a! held in )onc"ete 2gg"egate! '. *LR)&

11 that an employee ho tende"ed he" 'ol%nta"y

"e!ignation and !igned the %itclaim afte" "ecei'ing all the bene5t! d%e he" fo" he"

!epa"ation cannot claim that !he a! con!t"%cti'ely di!mi!!ed. The fact of he" t"an!fe" d%e

to a ne !ec"eta"ial !taJng patte"n hich !he ob3ected to& o" the alleged ho!tility on the

pa"t of he" employe"& cannot "ende" n%gato"y the 'ol%nta"y nat%"e of he" "e!ignation. She

a! not ea!ed o%t m%ch le!! a! !he fo"ced to "e!ign. Thi! i! a ca!e of 'ol%nta"y "e!ignation

and not a con!t"%cti'e di!mi!!al.

,n 2dmi"al Realty )ompany& ,nc. 2dmi"al +otel '. *LR)&

12 it a! "%led that the

t"an!fe" of the location of an employee$! oJce f"om %nde" the !tep! of the !tai"! to the

itchen hich allegedly ca%!ed he" mental to"t%"e hich fo"ced he" to "e!ign doe! not

amo%nt to con!t"%cti'e di!mi!!al b%t a ca!e of 'ol%nta"y "e!ignation. ,t a! not !hon that

he" t"an!fe" a! p"ompted by ill ill of management. ,t me"ely in'ol'ed a change in location

of the oJce and not a change of he" po!ition.

2n indication that the "e!ignation a! 'ol%nta"y and doe! not con!tit%te

con!t"%cti'e di!mi!!al i! the act of the employee ho "e!igned and too a lea'e of ab!ence

on the date of e8ecti'ity of hi! "e!ignation and hile on lea'e& he o"ed fo" the "elea!e of

hi! clea"ance and the payment of hi! 1/th

month pay and lea'e pay bene5t!. ,n doing !o& he&in fact& pe"fo"med all that an employee no"mally doe! afte" he "e!ign!. ,f indeed he a!

fo"ced into "e!igning& he o%ld not ha'e !o%ght to be clea"ed by hi! employe" and to be

paid the monie! d%e him. The 'ol%nta"y nat%"e of hi! act! ha! manife!ted it!elf clea"ly and

belied hi! claim of con!t"%cti'e di!mi!!al.13

2n e#ample of a "e!ignation hich a! deemed indicati'e of con!t"%cti'e di!mi!!al

i! the (C19 ca!e of D"eamland +otel Re!o"t '. Kohn!on.

14 Re!pondent& an 2%!t"alian

citi4en& o"ed a! Ope"ation! 0anage" fo" abo%t th"ee =/? month! ith petitione" hotel b%t

he a! not paid hi! !ala"ie! co""e!ponding the"eto& p"ompting him to tende" hi! "e!ignation

lette"& the teno" of hich "ead!<

“I hereby tender my resignation to you, Mr[. ] Wes Prentice, Dreamland Resort,Subic, Zambales, Philippines.

“Since joining Dreamland Resort & Hotel over three months ago, I have put my

heart and soul into the business. I have donated many hours of my personal time. I have

frequently worked seven days a week and twelve to thirteen hours a day.I am now

literally penniless, due totally to the fact that I have lent you and your resort/hotel

well over $200,000AU (approx 8million pesos) and your non-payment of wages to

me from 1st August 2007 as per Employment Agreement. xxx.15

The abo'e !tatement only goe! to !ho that hile it a! Kohn!on ho tende"ed hi!

"e!ignation& it a! d%e to the petitione"!$ act! that he a! con!t"ained to "e!ign. The

petitione"! cannot e#pect Kohn!on to tole"ate o"ing fo" them itho%t any

compen!ation. ,t i! impo!!ible& %n"ea!onable o" %nliely that any employee& !%ch a!

Kohn!on& o%ld contin%e o"ing fo" an employe" ho doe! not pay him hi! !ala"ie!.



















. ,LLE2L D,S0,SS2L @S. )O*STRU)T,@E D,S0,SS2L.

6,llegal di!mi!!al7 i! "eadily !hon by the act of the employe" in openly and

e#p"e!!ly !eeing the te"mination of employment of an employee; hile 6con!t"%cti'e

di!mi!!al&7 being di!mi!!al in di!g%i!e& i! not "eadily indicated by any !imila" act of the

employe" that o%ld openly and e#p"e!!ly !ho it! de!i"e and intent to te"minate the

employment "elation!hip.

0o"e conc"etely& the employe" in illegal di!mi!!al ca!e! o%ld no"mally defend and

3%!tify the te"mination b%t in con!t"%cti'e di!mi!!al& the"e being no e#p"e!! di!mi!!al to

!pea of& the employe" o%ld no"mally contend that the"e a! no te"mination at all.

,n te"m! of e'idence& in illegal di!mi!!al ca!e!& doc%menta"y& te!timonial and othe"

fo"m! of e'idence a"e add%ced by the employe" to !ec%"e aJ"mation f"om the co%"t of the

'alidity of the te"mination; in con!t"%cti'e di!mi!!al& the employe"& ho no"mally denie! the

te"mination& o%ld ad'ance a"g%ment! again!t the ci"c%m!tantial e'idence being p"e!ented

by the employee to p"o'e hi! con!t"%cti'e di!mi!!al.

2! fa" a! the "elief! %nde" 2"ticle (G16 of the Labo" )ode a"e conce"ned& the !ame

a"e a'ailable to both illegal and con!t"%cti'e di!mi!!al.

B. ,*ST2*)ES OF )O*STRU)T,@E D,S0,SS2L OR FOR)ED RES,*2T,O*.

Denying to the o"e"! ent"y to thei" o" a"ea and placing them on !hift! 6not by

ee! b%t almo!t by month7 by "ed%cing thei" o"ee to th"ee day!.17

Ha""ing the employee! f"om ente"ing the p"emi!e! hene'e" they o%ld "epo"t fo"

o" in the mo"ning itho%t any 3%!ti5able "ea!on& and they e"e made to ait fo" a

ce"tain employee ho o%ld a""i'e in the oJce at a"o%nd noon& afte" they had aited

fo" a long time and had left.18

,n!t"%cting the employee to go on inde5nite lea'e and a!ing him to "et%"n to o" only

afte" mo"e than th"ee =/? yea"! f"om the time he a! in!t"%cted to go on inde5nite lea'ed%"ing hich pe"iod hi! !ala"ie! e"e ithheld.19

,mplementing a "otation plan fo" "ea!on! othe" than b%!ine!! nece!!ity. 20

Sending to an employee a notice of inde5nite !%!pen!ion hich i! tantamo%nt to

di!mi!!al.21

Demoting a o"e" o" "e-a!!igning him in'ol'ing a demotion in "an o" dimin%tion of

!ala"ie!& bene5t! and othe" p"i'ilege!.22

Red%cing the employee$! f%nction! hich e"e o"iginally !%pe"'i!o"y in nat%"e and !%ch

"ed%ction i! not g"o%nded on 'alid g"o%nd! !%ch a! gen%ine b%!ine!! nece!!ity.23

,mpo!ing inde5nite p"e'enti'e !%!pen!ion itho%t act%ally cond%cting any in'e!tigation.

,t a! only afte" almo!t one =1? yea" that the employe" made non the 5nding! in it!in'e!tigation hich a! cond%cted ex arte" 24

Th"eatening a !icly employee ith di!mi!!al if he ill not "eti"e and p"omi!ing

employment to hi! !on and da%ghte". The employee "eti"ed and !igned to =(?

%itclaim! entitled 6Receipt and Relea!e7 in fa'o" of the company.25

Fo"cing the employee to "e!ign ith th"eat that if he ill not "e!ign& he ill 5le cha"ge!

again!t him that o%ld ad'e"!ely a8ect hi! chance! fo" ne employment.26

2!ing the employee to choo!e hethe" to contin%e a! a fac%lty membe" o" to ithd"a

a! a laye" again!t the mayo" ith hom the fo"me" oe! ce"tain fa'o"!& mae! the

ce!!ation f"om employment of !aid employee not 'ol%nta"y. S%ch act i! in the nat%"e of

a cont"i'ance to e8ect a di!mi!!al itho%t ca%!e.27































2!ing the employee to 5le a "e!ignation on the condition o" p"omi!e that !he o%ld be

gi'en p"io"ity fo" "e-employment and in con!ide"ation of immediately paying he" to =(?

month!$ 'acation hich !he de!pe"ately needed then beca%!e !he a! ill. The

employe"$! "ef%!al in bad faith to "eemploy he" de!pite it! p"omi!e to do !o amo%nted

to illegal di!mi!!al.28

)hanging the employee$! !tat%! f"om "eg%la" to ca!%al con!tit%te! con!t"%cti'edi!mi!!al.29

O8e" made by a labo" cont"acto" to "ea!!ign it! employee! to anothe" company b%t

ith no g%a"anteed o"ing ho%"! and payment of only the minim%m age. The te"m!

of the "edeployment th%! became %nacceptable fo" !aid employee! and fo"eclo!ed any

choice b%t to "e3ect the employe"$! o8e"& in'ol'ing a! it doe! a demotion in !tat%! and

dimin%tion in pay.30

P"e'enting the employee f"om "epo"ting fo" o" by o"de"ing the g%a"d! not to let he"

in. Thi! i! clea" notice of di!mi!!al.31

T"an!fe" of "e!pondent employee f"om )"edit and )ollection 0anage" to 0a"eting

2!!i!tant hich "e!%lted in demotion a! it "ed%ced hi! d%tie! and "e!pon!ibilitie!altho%gh the"e a! no co""e!ponding dimin%tion in hi! !ala"y. ,n holding that the"e a!

con!t"%cti'e di!mi!!al& the co%"t too note of the fact that the fo"me" po!ition i!

manage"ial hile the latte" i! cle"ical in nat%"e.32

Red%cing the n%mbe" of t"ip! of the d"i'e"! and !ho"tening thei" o"day! hich

"e!%lted in the dimin%tion of thei" pay.33

Fo"cing the employee to tende" he" "e!ignation lette" in e#change fo" he" 1/ th month

pay& the "ea!on being that the employee a! fo%nd by the employe" to ha'e 'iolated it!

no-employment-fo"-"elati'e!-ithin-the-thi"d-deg"ee-policy& !he ha'ing been

imp"egnated by a ma""ied co-employee.34

G. E;20PLES OF )2SES :+ERE F2)TS PRO@ED )O*STRU)T,@E D,S0,SS2L.

. )o!a"e '. H"oadcom 2!ia& ,nc.

35 - ,n thi! (C19& the S%p"eme )o%"t decla"ed

petitione" a! ha'ing been con!t"%cti'ely di!mi!!ed ba!ed on the fact! and ci"c%m!tance!

obtaining he"ein. ,t i! clea" that the "e!pondent! al"eady "e3ected )o!a"e$! contin%ed

in'ol'ement ith the company. E'en thei" "ef%!al to accept the e#planation hich )o!a"e

t"ied to tende" on 2p"il (& (CCG f%"the" e'idenced the "e!ol'e to deny )o!a"e of the

oppo"t%nity to be hea"d p"io" to any deci!ion on the te"mination of hi! employment. The

"e!pondent! allegedly "ef%!ed acceptance of the e#planation a! it a! 5led beyond the me"e

9B-ho%" pe"iod hich they g"anted to )o!a"e %nde" the memo dated 0a"ch /C& (CCG.

+oe'e"& e'en thi! limitation a! a Wa in the memo o" notice to e#plain hich only f%"the"

!igni5ed the "e!pondent!$ di!c"imination& di!dain and in!en!ibility toa"d! )o!a"e&

appa"ently "e!o"ted to by the "e!pondent! in o"de" to deny thei" employee of the

oppo"t%nity to f%lly e#plain hi! defen!e! and %ltimately& "etain hi! employment. The )o%"t

empha!i4ed in ing of ing! T"an!po"t& ,nc. '. 0amac&

36 the !tanda"d! to be ob!e"'ed by

employe"! in complying ith the !e"'ice of notice! p"io" to te"mination hich "e%i"e

compliance ith the "ea!onable pe"iod of at lea!t 5'e =A? calenda" day! f"om "eceipt of the

notice ithin hich to e#plain hi! !ide.

,n !%m& the "e!pondent! e"e al"eady "e!ol%te on a !e'e"ance of thei" o"ing

"elation!hip ith )o!a"e& notith!tanding the fact! hich co%ld ha'e been e!tabli!hed by hi!

e#planation! and the "e!pondent!$ f%ll in'e!tigation on the matte". ,n addition to thi!& the

fact that no f%"the" in'e!tigation and 5nal di!po!ition appea"ed to ha'e been made by the

"e!pondent! on )o!a"e$! ca!e only negated the claim that they act%ally intended to 5"!t loointo the matte" befo"e maing a 5nal dete"mination a! to the g%ilt o" innocence of )o!a"e.























Thi! al!o manife!ted f"om the fact that e'en befo"e )o!a"e a! "e%i"ed to p"e!ent hi! !ide

on the cha"ge! of !e"io%! mi!cond%ct and illf%l b"each of t"%!t& he a! !%mmoned to hi!

!%pe"io"$! oJce and a! a!ed to tende" hi! immediate "e!ignation in e#change fo" 5nancial

a!!i!tance.

(. T%a!on '. Han of )omme"ce.

37 ,n thi! (C1( ca!e& the S%p"eme )o%"t "%led

that petitione" a! fo"ced to "e!ign. P"e!!%"e a! e#e"ted on he" to "e!ign f"om he" o".

The )o%"t ha! in fact e#amined the e#change of comm%nication! beteen petitione" and

the "e!pondent oJce"! of "e!pondent ban befo"e it a""i'ed at it! "%ling that petitione" a!

con!t"%cti'ely di!mi!!ed. ,t a! p"o'ed& among othe"!& that petitione" a! "eplaced in he"

po!ition hile !he a! on lea'e. Lie T%a!on& any "ea!onable pe"!on !imila"ly !it%ated o%ld

ha'e felt compelled to gi'e %p he" po!t a! !he a!& in fact& !t"ipped of it con!ide"ing that

!omeone el!e a! al"eady di!cha"ging he" f%nction! and occ%pying he" oJce.

C. SO0E PR,*),PLES O* )O*STRU)T,@E D,S0,SS2L OR ,*@OLU*T2R1 OR FOR)ED

RES,*2T,O*.

0e"e allegation! of th"eat o" fo"ce do not con!tit%te e'idence to !%ppo"t a 5nding of

fo"ced "e!ignation o" con!t"%cti'e di!mi!!al.38

2 th"eat to !%e the employee i! not %n3%!t and ill not amo%nt to fo"ced "e!ignation o"

con!t"%cti'e di!mi!!al. Fo" in!tance& a th"eat to 5le e!tafa ca!e& not being an %n3%!t act&

b%t "athe" a 'alid and legal act to enfo"ce a claim& cannot at all be con!ide"ed a!

intimidation. 2 th"eat to enfo"ce one$! claim th"o%gh competent a%tho"ity& if the claim i!

3%!t o" legal& doe! not 'itiate con!ent.39

Employee ho allege! that he a! coe"ced o" intimidated into "e!igning ha! the

b%"den to p"o'e !%ch claim.40

i'ing the employee the choice o" option beteen "e!ignation and in'e!tigation i! not

illegal.41

The fact! of the ca!e !ho%ld be con!ide"ed to dete"mine if the"e i! con!t"%cti'e

di!mi!!al.42

@ol%nta"y "e!ignation i! di8e"ent f"om con!t"%cti'e di!mi!!al. 2n employee ho

tende"ed he" 'ol%nta"y "e!ignation and !igned the %itclaim afte" "ecei'ing all the

bene5t! d%e he" fo" he" !epa"ation cannot claim that !he a! con!t"%cti'ely

di!mi!!ed.43

2n employee may be con!t"%cti'ely di!mi!!ed and at the !ame time legally

di!mi!!ed. The ca!e in point i! Fo"mante! '. D%ncan Pha"mace%tical! Phil!. &

,nc.

44 Petitione"45 a! con!t"%cti'ely di!mi!!ed beca%!e& hile !till employed ith the

"e!pondent& he a! compelled to "e!ign and fo"ced to go on lea'e. 2fte" being

conf"onted ith the complaint fo" !e#%al ab%!e lodged by a !%bo"dinate femaleemployee and befo"e being "e%i"ed to e#plain hi! !ide& petitione" a! no longe"

alloed to pa"ticipate in the acti'itie! of "e!pondent company. +i! !ala"y a! no longe"

"emitted to him. +i! !%bo"dinate! e"e di"ected not to "epo"t to him and the company

di"ected one of it! di!t"ict manage"! to tae o'e" hi! po!ition and do hi! f%nction!

itho%t p"io" notice to him. +e a! "e%i"ed to e#plain hi! !ide on the i!!%e of !e#%al

ab%!e a! ell a! the cha"ge of in!%bo"dination only afte" the!e thing! ha'e al"eady

been done to him. +oe'e"& hi! di!mi!!al a! con!ide"ed legal beca%!e the"e a! a

3%!t ca%!e fo" hi! di!mi!!al f"om the !e"'ice con!i!ting of hi! !e#%al ab%!e of a

!%bo"dinate female employee hich& altho%gh not cited in the *otice of Te"mination

!e"'ed on him hen he a! te"minated& a! d%ly p"o'ed d%"ing the t"ial of the ca!e

befo"e the Labo" 2"bite". Since the di!mi!!al& altho%gh fo" a 'alid ca%!e& a! done























itho%t d%e p"oce!! of la& the employe" a! o"de"ed to indemnify petitione" ith

nominal damage! in the amo%nt of P/C&CCC.CC.

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Ch4 Termination of Employment

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Transcript of Ch4 Termination of Employment