JUST CAUSES Termination of Employment

Edmar B. Cornejo

Management’s Rights

1.Right to Manage People in General

2.Right to Discipline3.Right to Transfer Employees4.Right to Demote5.Right to Dismiss – is a measure

of self protection

Just Causes – Under article 282 it is called “dismissal” or “discharge”

those lawful or valid grounds for termination of employment which arise from causes directly attributable to the fault or negligence of the erring employee.

1. JUST CAUSE : Serious Misconducttransgression of some established and

definite rule of action, a forbidden act, a dereliction of duty, willful in character and implies wrongful intent and not error in judgment

Examples of Misconducta) Pressure and Influenceb) Sleeping on Post, gross insubordination,

challenging superior to a fightc) Sexual Harassment

Villarama vs NLRC and Golden Donuts Inc., G.R. No. 106341 September 2, 1994

d)Obscene Insulting or Offensive words against a superior

e)Extra Marital Relationship as Immorality

Cause Found Inadequate1. Fisticuffs2. (1st Offense) Vending, soliciting, engaging in

usurious activitiesTeacher in Love with Student: The heart has the reason which reason does not know

Chua-Qua vs Hon. Jacobo C. Clave, etal., G.R. No. L-495449, August 30, 1990

2. JUSCT CAUSE : WILLFULL DISOBEDIENCEThe employees are bound to follow

reasonable and lawful orders of the employer which are in connection with their work. Failure to do so may be a ground for dismissal or other disciplinary action.

Requisites to Concur Willful Disobedience1. The employees Attitude (wrongful and

perverse)2. Qualities of Order (lawful and reasonable,

known to the employee and pertain to the duties and responsibilities of employee.

Gold City Integrated Port Services, Inc. Vs NLRC, et al., G.R. No. 86000, Sept.. 21, 1990

Disobeying of a valid transfer order may justify dismissal,

Disobeying of an invalid transfer order does notValid transfer – the prerogative of the employer to transfer the employees in the interest of the efficient and economic operation of its business Abbot Laboratories vs NLRC, G.R. No. 75659 October 12, 1987Invalid Transfer – should not be used to subterfuge by the employer to get rid of an undesirable worker

Yuco Chemical Industries, Inc. vs Ministry of Labor and Employment, et al., G.R. No 78656 May 28, 1990

Willful Disobedience Cont….

May an employee disobey and Inconvenient transfer?

when the employee is opposing the transfer on ground of inconvenience or hardship that the transfer will cause to the employee or his family

Homeowrners Savings and Loan Association, Inc. vs NLRC and M. Cabatbat G.R. No. 97067, September 26, 1996

Escobin, et al. vs NLRC, Peftok Integrated Services, Inc. (PISI), et al., G.R. No. 118159, April 15, 1998

Willful Disobedience Cont….

Change of Position of WorkBenguet Electric Cooperative vs J. Flanza

G.R. No. 158606 March 9, 2004

Test of Validity of Transferconstructive dismissal exist when an act of

clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment

Blue Dairy Corp. vs. NLRC and E.R. Recalde, G.R. No. 129843 September 147, 1999

Willful Disobedience Cont….

Willful Disobedience Cont….

Transfer with Promotion of a Managertransfer becomes unenforceable if the

transfer is coupled with or is in the nature of a promotion, where the promotion is rejected by the employee.

Dosch vs. NLRC and Nortwest airlines, G.R. No. 51182 July 5, 1983

3. Just Cause : Neglect of Dutiesthe want or absence of or failure to

exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.

Gross Negligence – want or absence or failure to exercise slight care or diligence or the entire absence of care

Associated Bank vs. National Labor Relations Commission, G.R. No. 86023, June 19, 1989

Abandonment - absent for a period of one year and the prolonged absence was without valid notice or leave from the company, which is not by reason of illness or disease.

Elements of Abandonment; Immediate Filing of Complaint1. Failure to report for work or absence without

valid or justifiable reason without any intention of returning back

2. Clear intention to sever the employee employer relationship

Labor et.al., vs NLRC and Gold City Commercial Complex, Inc. and Uy, G.R. No. 110388, September 14, 1995

Immediate filing of complaint negates abandonment ; Exception

JUST CAUSE : NEGLECT OF DUTIES CONT……

Tardiness and Absenteeismacts of insubordination, coupled with habitual tardiness are sufficient causes for dismissal

Valid Dismissal Due to Unauthorized absence

Cando Vs NLRC and Filipinas Bank, G.R. No. 91344, September 14, 1990

JUST CAUSE : NEGLECT OF DUTIES CONT……

JUST CAUSE : DISHONESTY, LOSS OF CONFIDENCE

any act, omission, or concealment which involves a breach of legal duty, trust, or confidence justly reposed and is injurious to another

Falsification of Time CardsSan Miguel Corporation vs. NLRC, G.R. No.

82467 June 29, 1989Theft of Company Property

Firestone Tire and Rubber Company of the Philippines vs. Lariosa, G.R. No. 70479 February 27, 1987

Philippine Airlines, Inc. vs NLRC, et al., G.R. No. 93934, June 30, 1989

Loss of Confidencean employer cannot be compelled to

continue in employment an employee guilty of acts inimical to the interest of the employer and justifying loss of confidence in him

Loss of Confidence apply to1. Cases involving employees occupying

positions of trust and confidence (managerial employee)

2. Those situations where the employee is routinely charged with care and custody of the employer’s money or property. (cashiers, auditors, property custodian, etc.)

Dishonesty Loss of Confidence Cont……

Dishonesty Loss of Confidence Cont……

Conflict of Interest; Employment with Competitor

as secretly engaging in a business which renders him a competitor and rival of his employer. It constitutes a breach of an implied condition of the contract of employment.

Guidelines of Applying Loss of Confidence1. Loss of Confidence should not be simulated2. Should not be used as a subterfuge for causes

which are improper, illegal or unjustified3. May not be arbitrarily asserted in the face o

overwhelming evidence to the contrary4. Must be genuine5. Employees involve should hold a position of

trust and confidence

JUST CAUSE : COMMISSION OF A CRIME OR OFFENSE

Commission of a crime or offense by the employee against his employer or any immediate member of his family or his duly authorized representative

Conviction or Prosecution Not Required

conviction of an employee in a criminal case is not indispensable to warrant his dismissal by his employer

ANALOGOUS CAUSESTo be considered analogous to the

just causes enumerated, however, a cause must be due to the voluntary and willful act or omission of the employee.

In a termination for just cause, due process involves the two-notice rule:

a) A notice of intent to dismiss specifying the ground for termination, and giving said employee reasonable opportunity within which to explain his or her side;b) A hearing or conference where the employee is given opportunity to respond to the charge, present evidence or rebut the evidence presented against him or her;c) A notice of dismissal indicating that upon due consideration of all the circumstances, grounds have been established to justify termination.

Case Study

G.R. No. 199338 : January 21, 2013

ELEAZAR S. PADILLO,Petitioner,

v.s

 RURAL BANK OF NABUNTURAN, INC. and

MARK S. OROPEZA, Respondent.

•On October 1, 1977 Padillo was employed with Rural Bank in Nabunturan, Incorporated, Nabunturan, Compostela Valley Province.

•In 2003, the bank had experienced liquidity problems prompting the company to procure insurance plans from Philam Life for its employees amounting to P100,000. The plan would mature on July 11, 2009

•On October 14, 2004, the bank was taken over by Mark Oropeza who bought majority shares of stocks and became the president of the bank. With Oropeza’s management, the bank’s finances had improved and regained its liquidity.

•But in 2007, Padillo suffered a mild stroke and he was diagnosed having hypertension which already affected his work.

•On September 10, 2007 Padillo then wrote a letter to Oropeza expressing his intention to avail of the bank’s early retirement package but despite several follow-ups, his letter “remained unheeded”.

•On October 3, 2007 Padillo was separated from his employment without affording him any retirement benefits prompting him to file a labor case before the NLRC Regional Arbitration Branch XI in Davao City.

•Padillo asserted that the bank had adopted a policy of granting its aging employees early retirement packages, pointing out Nenita Lusan, was accorded with Php. 348,672.oo when she retired at the age of 53.

•Answering the charges hurled by Padillo, the bank and Oropeza countered that Padillo’s claim of retirement benefits “was not favorably acted upon for lack of any basis to grant the same

•In a decision on March 13, 2009, the labor arbitration office dismissed Padillo’s claim ruling that he was disqualified from demanding retirement benefits pursuant to Article 300 of the Labor Code of the Philippines as he was only 55 years of age, five years short of the law’s prescribed plan, retirement age of 60 and 10 years short of compulsory requirement 65 .

The labor arbitration office, however, ordered the bank to pay P100,000 as advance payment from the amount receivable from Philam Life

•On December 29, 2009 Padillo elevated the labor arbiter’s findings before the NLRC, which reversed the decision and granted P164,903.70 on top of the P100,000 he would get from Philam Life.

• On June 28, 2011 The NLRC decision was later reversed by the Court of Appeals but with modification to pay Padillo the amount of P50,000 as financial assistance in addition to the P100,000 from Philam Life

The CA awarded the amount to Padillo for consideration of his 29 years of service with no derogatory record in the company.

•Not satisfied with the CA decision, Padillo raised the issue before the Supreme Court.

•But before the Supreme Court could hand down its decision, Padillo died on February 24, 2012 and the case was pursued by his heirs.

The Petition was Partially Granted In a decision promulgated on January 21,

2013, the SC agreed with the CA ruling that Padillo could not get retirement benefits pursuant to law but the High Court increased the amount awarded to Padillo from P50,000 to P75,000 in addition to the P100,000 from Philam Life.

Padillo did not reach the retirement ageNo established company policy for retirement of aging employees was provenDisease as ground for termination shall not apply because it was Padillo who severed the employment and not the bank borne from the letter that he voluntarily retired and was not terminated by the bank. Separation pay must be denied.

SOURCESAzucena Jr. C.A. (2010) The Labor Code with Comments and

Cases. (pp. 748- 785) Volume II, 7th Edition. Rex BookstoreSupreme Court Reports Annotated. Volume 689. Central Book

Supply Inc.G.R. No. 199338 : January 21, 2013 Eleazar S. Padillo,** Petitioner, V.S Rural Bank Of Nabunturan, Inc. And Mark S. Oropeza, Respondent pdf. Retrieved on August 30, 2014 from http://sc.judiciary.gov.ph/jurisprudence/2013/january2013/199338.pdfUracion R.U. , Bureau of Labor Relations. (2014) Retrieved

August 30, 2014 from http://www.blr.dole.gov.ph/index.php/faqs/termination-of-employment