TTERMINATIONERMINATION B BYY T THEHE E EMPLOYEEMPLOYEE H HIMSELFIMSELF

1.    With just cause (article 285 par. b)

a. Serious insult Serious in character Committed by the employer or his

representative Against honor or person of the employee

b. Inhumane or unbearable treatment inhumane or unbearable in nature perpetrated be the employer or his

representative

c. Commission   of   crime   or   offense   against   the employee or immediate family members crime or offense is committed committed by the employer of his

representative perpetrated against person of the employee or any of his immediate relatives

d. Other analogous causes

2.    Without cause (article 285 par. a) Requirements: 1. Written (oral or written) notice to the employer 2. at least 30 days in advance

Without notice the employee shall be liable for damages

Acceptance of the resignation tendered nt\y an employee is necessary to make the resignation effective (shie jie corp. vs. national federation of labor G.R. no. 153148, july 15, 2005)

However, the acceptance of a resignation does not require the conformity of the resigning employee. such conformity only indicates that the employee was forced to resign for which reason her conformity was obtained to make it appear as voluntary or legal (Rase vs. NLRC, G.R. no. 110637, October 2, 1997.)

Once the resignation is accepted, the employee is no longer has any right of job. it goes without saying, therefore that the resignation terminates the employee-employer relationship.

30 day period requirement to stay becomes discretionary on the part of the management as an employee who intends to resign may be allowed a shorter period before his resignation becomes effective.

PURPOSE OF NOTICE The employer has no control over resignations and so notice reqiurments was devised in order to insure that no distruption of work would be involve by reason of resignation. Resignation

It is a voluntary act of the employee who finds himself in the situation where he believes that personal reason cannot be sacrificed in favor of the exigency of the service and that he has no other choice but to dissociate himself from employment. resignation is a formal pronouncement

of relinquishment of office accompanied by an act of relinquishment (Reynaldo Valdez vs. NLRC February 9 1998)

Resignation must be voluntary and made with the intention of relinquishing the office, accompanied by an act of relinquishment (Lilis Pascua vs NLRC march 13, 1998)

The assumption of new job or office by an employee prior receiving his employer's acceptance of his resignation is clearly inconsistent with any desire to remain in employment. his resignation is deemed effective ( Philippine's today, Inc. vs. NLRC G.R. no.112965 January 30, 1997)

A resignation letter which contains words of gratitude and appreciation to the employer can hardly come from employees who are force to resign(St. Michael Academy vs. NLRC G.R. no. 119512, July 13, 1998)

General rule An employee who voluntarily resign form employment is not entitled to a separation fee. Exception

1. When it i stipulated in the employment contract or CBA2. It is sanctioned by established employer practice or policy3. If there is a basis in the precedent (Hinatuan Mining Corp. vs NLRC February 21 1997)4. Employer agrees to give such benefit as an incident of resignation(Alfaro vs, C.A. August 28, 2001)

Resignation is withdrawable even if the employee called it

"irrevocable" but after it is accepted or approved by the employer, its withdrawal needs the employer's consent (Custodio vs. Ministy of labor and employment G.R. no. 643174)

Constructive dismissal

Involuntary resignation resorted to when continued employment is rendered impossible, unlikely or unreasonable. when there is a demotion in rank or diminution of salary, or when there is clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.

Petioner argues that he was compelled to file a constructive dismissal because he had been demoted from appraiser to clerk and not given any work to do, while his table has been placed near the toilet and eventually removed. he adds that the reshuffling of the employees was done in bad faith because it was designed primarily to force him to resign. Jurisprudence recognizes the exercise of management prerogative. in the pursuit of legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another provided there is no demotion in rank or diminution in salaries, privileges and other benefits and the action is not motivated by discrimination , made in bad faith or effected as a form punishment or demotion without sufficient cause, this privilege is inherent in the right of employers to control and manage their enterprise effectively( Elmer Mendoza vs. Rural Bank of Lukban, july 07 2004)

In the case of constructive dismissal, the employer has the burden of proving that he transfer of an employee is not for valid and legitimate grounds such as genuine business necessity. particularly, for a transfer not to be considered a constructive dismissal the employer must be able to show that such transfer is not unreasonable, inconvenient or

prejudicial to the employee nor does it involve a demotion in rank or diminution of his salaries, priveleges and other benefits. failure of the employer to overcome this burden of proof, the employee's transfer shall no doubt be tantamount to unlawful constructive dismisal (Mercury Drug Corp. vs. Araceli Domingo march 28, 2005)

Even without quitting from employment and the suspension is beyond 30 days it amounts to constructive dismissal (Hyatt Taxi services INc, vs. Castinoy, G.R. no. 143204 june 26, 2001.

Temporary Suspension of employment (article 286)

The following situations are contemplated therein: 1. Bona-fide suspension by the employer of the operation of his business or undertaking for a period not exceeding six months 2. Fulfillment by the employee of a military duty or civic duty. What   is bona-fide   suspension   of   operation   for a   period   not exceeding six months?

1. No law on temporary retrenchment or lay off, article 286 applies only by analogy

2. Extent of suspension of operation my involve only a section or department of the company not necessarily the entire operations

3. Burden to prove bona-fide suspension of operation is on the employer

Suspension of the operation of business prior to closure

is held as evidence of good faith (General Service vs. NLRC, G.R. no. 148340,january 26,2004)

Employees are not entitled to their wages and benefits during the 6-months period because within the same period, the employer-employee relationship is deemed suspended.

The employer may suspend his business operation for less than six months but not more. Otherwise, the employee is entitled to a severance pay.

The effect of employment of the employee in other establishment during six months period cannot be said that the employer terminated their employment for it was the employee themselves who severed their relationship with their employer (JPL marketing promotions vs. C.A. G.R. no. 157634 may 16 2005)

TERMINATION BY THE EMPLOYER:JUST CAUSES & DUE PROCESS REQUISITES

I. JUST CAUSES

Article   282.  Termination   by   employer. An employer may terminate an employment for any of the following just causes:

a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

b) Gross and habitual neglect by the employee of his duties;

c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and

e) Other causes analogous to the foregoing.

A. Serious Misconduct and Willful Disobedience

Serious Misconduct: DefinedMisconduct has been defined as improper or wrong conduct. It

is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must nevertheless be in connection with the employee’s work to constitute just cause for his separation. (Wilfredo M. Baron et. al. vs.

NLRC, G.R. No. 182299 (2010); Caltex Phil. Vs. Hermie G. Agad, G.R. No. 162017 (2010); Colegio de San Juan de Letran-Calamba v. Villas, 447 Phil. 692 (2003); Samson v. National Labor Relations Commission, 386 Phil. 669, 682 (2000))

Requisites:For misconduct to be a just cause for dismissal:

a) it must be serious;b) it must relate to the performance of the employee’s duties;

andc) it must show that the employee has become unfit to continue

working for the employer. (Blazer Car vs. Sps. Bulauan, G.R. No. 181483 (2010); Technol Eight Philippines vs. NLRC, G.R. No. 187605 (2010); Supreme Steel Pipe Corporation v. Bardaje, 522 SCRA 155; Lopez v. National Labor Relations Commission, G.R. No. 167385, (2005)

In addition, it has been said in other cases that the misconduct must have been committed against the employer or the business in general and not merely against a co-employee.

Examples and Analogous Cases:1. Unauthorized taking of company documents and files,

failure to pay unremitted collections, failure to surrender keys to the filing cabinets despite earlier instructions, concealment of shortages, and failure to record inventory transactions pursuant to a fraudulent scheme are acts of grave misconduct (Wilfredo M. Baron Et. Al. vs. NLRC, G.R. No. 182299 February 22, 2010)

2. Theft (Caltex Phil. Vs. Hermie Agad, G.R. No. 162017, April 23, 2010;  Philippine Long Distance Telephone Company v. National Labor Relations Commission, 164 SCRA 671; Zenco Sales, Inc. v. National Labor Relations Commission, 234 SCRA 689; Philippine National Construction Corporation v. National Labor Relations Commission, 252 Phil. 211, 1989)

3. Punching/Signing of timecards for other employees or requesting another employee to punch/sign his Time Card Record when punishable by dismissal by company policy (Eats-Cetera Food Services Outlet vs. Letran and Espedero, October 2, 2009)

4. A series of irregularities when put together may constitute serious misconduct (Gustilo vs. Wyeth Phil., G.R. No. 149629, 2004; Piedad vs. LNEC, G.R. No. 73735)

5. Use of drugs – instigation, as a defense, can only be used to avoid criminal liability but can’t be used as a defense against termination of employment (Roquero vs. PAL, 2003)

6. Utterances of obscene, insulting or offensive words against a superior (Phil. Aeolus Automative United Corp. vs. NLRC, G.R. No. 124617, 2000; ADMC vs. Hon. Deputy Minister of Labor, G.R. No. 70552)

7. Pressure and influence exerted by a college teacher to a colleague to change a failing grade to a passing one as well as his misrepresentation that the student is his nephew (Padilla vs. NLRC, G.R. No. 114764)

8. Intoxication of an employee which interferes with his work, constitutes serious misconduct. It is well-settled by jurisprudence that serious misconduct in the form of drunkenness and disorderly or violent behavior is a just cause for the dismissal of an employee. (Sanyo Travel Corporation vs. NLRC, G. R. No. 121449, Oct. 2, 1997; Club Filipino, Inc. vs. Sebastian, G. R. No. 85490, July 23, 1992, 211 SCRA 717).However, the nature of the employee’s work, the dignity of his position and the surrounding circumstances of the intoxication, must be taken into account.

9. Gambling within company premises if it carries the penalty of termination under the company rules (Dimalanta vs. Sec. of Labor, G.R. No. 83854, 1989)

10. Fighting within work premises if it adversely affects the employer’s interests when it distracts employees, disrupts operations and creates a hostile work atmosphere. (Solvic Industrial Corp. vs. NLRC, G. R. No. 125548, Sept. 25, 1998).

11. Having sexual intercourse within company premises (Stanford Microsystems, Inc. vs. NLRC, G. R. No. L-74187, Jan. 28, 1988).

12. Immorality, as a general rule, is not a just ground to terminate employment. The exception is when such immoral conduct is prejudicial or detrimental to the interest of the employer. For instance, in a case involving a teacher, immorality was defined as a course of conduct which offends the morals of the community and is a bad example to the youth whose ideals a teacher is supposed to foster and to elevate, the same including sexual misconduct. Therefore, when a teacher engages in extra-marital relationship, especially when the parties are both married, such behavior amounts to immorality, justifying his termination from employment. (Santos, Jr. vs. NLRC, G. R. No. 115795, March 6, 1998, 287 SCRA 117)

13. Sexual Harassment (Villarama vs. NLRC, et al., G. R. No. 106341, Sept. 2, 1994). The act of sexually harassing a co-employee within the company premises even after office hours is a work-related matter considering that the peace of the company is thereby affected. (Navarro III vs. Damasco, G. R. No. 101875, July 14, 1995).

Willful DisobedienceFor the ground of “willful disobedience” to be considered a just cause for termination of employment, the following requisites must concur, namely:

a) The employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a ‘wrongful and perverse attitude; and

b) The order violated must have been reasonable and lawful and made known to the employee and must pertain to the duties which he had been engaged to discharge.

Not every case of insubordination or willful disobedience by an employee of a lawful work-connected order of the employer or its representative is reasonably penalized with dismissal. There must be reasonable proportionality between the offense and the penalty imposed therefor. (Golden City Integrated Port Services vs. NLRC, Sept. 21, 1990)

As to what is reasonable under order or rule will depend upon the circumstances of each case. Reasonableness, however, has reference not only to the kind and character of directions and commands, but also to the manner in which they are made. The disobedience must relate to substantial matters, not merely trivial or unimportant matters. Further, it must be resorted to without regard to its consequences. (Dept. of Labor Manual, Sec. 4343.01[2])Not   Constitutive   of   Disobedience   (to   warrant   dismissal)   if Tolerated 

Where a violation of company policy or breach of company rules and regulations was found to have been tolerated by management, the same could not serve as a basis for termination.As held in the 2004 case of Coca-Cola Bottlers Philippines, Inc. vs. Vital, [G. R. No. 154384, Sept. 13, 2004], if an employee was merely following the instructions of his supervisor, his act should be deemed in good faith. Clearly, his dismissal from the service on the ground of willful disobedience or violation of company rules and regulations is not justified.

Example: Willful disobedience of a valid transfer (Abbot Laboratories vs. NLRC, October 12, 1987)B. Gross and Habitual Neglect

Gross negligence has been defined as the (1) want or absence of or failure to exercise slight care or diligence, or the entire absence of care.(2) It evinces a thoughtless disregard or consequences without exerting any effort to avoid them(National Bookstore vs. CA, Feb. 27, 2002). To warrant dismissal, however, (3) it must be habitual which implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. The single or isolated act of negligence does not constitute a just cause for the dismissal of the employee (Abelardo Abel vs. Philex Mining Corp., July 31, 2009). Nonetheless, habituality may be disregarded in consideration of the following:

a) Element of habituality may be disregarded where loss is substantial;

b) Element of habituality may be disregarded if totality of evidence justifies dismissal;

c) Element of actual loss or damage, not an essential requisite.

Examples and Analogous Cases:1. Excessive absences (Arsenio Quiambao vs. Manila Electric

Co., Dec. 18, 2009)2. Habitual tardiness (Agullano vs. Chirstian Publishing, Sept.

25, 2008)3. Abandonment, provided two elements must concur: (1) the

failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. (Labor v. National Labor Relations Commission, G.R. No. 110388). This is negated though by the filing of a complaint by the employee of illegal dismissal charges against the employer (Hodieng Concrete Products vs. Dante Emilia, G. R. No. 149180, Feb. 14, 2005). Nonetheless, the rule on filing a complaint is not absolute. The rule that abandonment of work is inconsistent with the filing of a complaint for illegal dismissal is not applicable to a case where the complainant, taken together with his

contemporaneous conduct, does not pray for reinstatement and just asks for separation pay instead (Jo vs. NLRC, G. R. No. 121605, Feb. 2, 2000).

4. Sub-contracting for another company indicative of abandonment (Agabon vs. NLRC, [G.R. No. 158693, November 17, 2004])

5. Sleeping on the job may be a valid ground for dismissal in instances where the work of the employee, such as a security guard necessitates that he be awake and watchful at all times in as much as his function is to protect the company from pilferage. (VH Marketing vs. NLRC, January, 19,2000)

6. Delivery of a bank employee of newly approved credit cards to a person she had never seen before without even bothering to ask for a receipt, thereby allowing fictitious persons to use them, causing PhP 740, 000.00 loss to the bank (Citibank vs. Gatchalian, January 18, 1995).

C. Fraud and Willful Breach of Trust

Refers to any fault or culpability of the employee in the discharge of his duty rendering him absolutely unworthy of the trust and confidence demanded by his position (Int’l Rice Research Inst. vs. NLRC, 221 SCRA 760)

Requisites:a) Loss of trust must be based on willful breach;b) Was committed willfully or was done intentionally,

knowingly and purposely without justifiable cause; andc) Loss of confidence is premised on the fact. (Roberto

Gonzales vs. NLRC and Pepsi Cola, G.R. No. 131653, 2001)

Guidelines (Tolentino Case):a) The loss of confidence must not be simulated;b) It should not be used as a subterfuge for causes which are

illegal, improper or unjustified;c) It may not be arbitrarily asserted in the face of

overwhelming evidence to the contrary;d) It must be genuine, not a mere afterthought, to justify

earlier action taken in bad faith; ande) The employee involved holds a position of trust and

confidence. (Tolentino vs. PLDT, G. R. No. 160404, June 8, 2005).

Application of Rule on Managerial and Rank-and-file EmployeesWith respect to rank-and-file personnel, loss of trust and

confidence, as ground for valid dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient (Triumph International (Phils.), Inc. v. Apostol, G.R. No. 164423, June 16, 2009).

As regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. It’s sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position (Uniwide Sales Warehouse Club v. NLRC, G.R. No. 154503, February 29, 2008).

Having this in mind, loss of confidence should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the employee is routinely

charged with the care and custody of the employer's money or property. To the first class belong managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property (Mabeza vs. NLRC, 1997)

Grant Of Promotions And Bonuses Negates Loss Of Trust And Confidence

In Norkis Distributors, Inc. vs. NLRC, [G. R. No. 112230, July 17, 1995], where the employer alleged inefficiency and loss of trust and confidence as grounds for termination of employment, the High Tribunal said that these are negated by the fact that the evidence shows that the employee received several promotions since his employment in 1986 and was given bonuses for his collection efforts and a compensation adjustment for his excellent performance.

Restitution Does Not Have Absolutory EffectThe Supreme Court has reiterated this rule in Santos vs. San

Miguel Corporation, [G. R. No. 149416, March 14, 2003]. Hence, even if the shortages have been fully restituted, the fact that the employee has misappropriated company funds is a valid ground to terminate the services of an employee of the company for loss of trust and confidence. (San Miguel Corporation vs. Deputy Minister of Labor and Employment, 145 SCRA 196, 203-204 [1986]).

D. Commission of a Crime or Offense

The commission of a crime or offense by the employee may justify the termination of his employment, if such crime or offense is committed against any of the following persons:

a) his employer;b) any immediate member of his employer’s family (Spouse,

ascendants, descendants, or legitimate, natural or adopted brothers or sisters, or of his relatives by affinity in the same degrees, and those by consanguinity within the fourth civil degree, Art. 11, Sec.2 Revised Penal Code);

c) or his employer’s duly authorized representative.

The conviction of an employee in a criminal case is not indispensable to warrant his dismissal by his employer and the fact that a criminal complaint against the employee has been dropped by the city fiscal is not binding and conclusive upon the labor tribunal (SPIC vs. NLRC, March 16, 1989)

E. Analogous Cases

The determination of whether the cause for terminating employment is analogous to any of those enumerated under Article 282 of the Code will depend on the circumstance of each case.

To be analogous to the just causes enumerated, however, a cause must be due to the voluntary or willful act or omission of the employee (Nadura vs. Benguet Consolidate, Inc., Aug. 24, 1962).

[Examples of analogous cases provided in above enumerated just causes]

II. DUE PROCESS REQUISITE: TERMINATION FOR JCs

Article 277 of the Labor Code provides:

x x x x

(b) Subject to the constitutional right of workers to security

of tenure and their right to be protected against dismissal except for a just or authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the workers whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to the guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer.

The Omnibus Rules Implementing the Labor Code:   Rule   I,   Section   2(d)of   Book   VI provides:

Section 2. Security of Tenure. —x x x x(d) In all cases of termination of employment,

the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

i. A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.

ii. A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him.

iii. A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

A. Outright Termination Violates Due Process

The employer should give an employee who committed an act considered lawful cause for his dismissal, the opportunity to explain

or present his side. There should be no outright termination of his employment without due process. Otherwise, it will be a violation of his right to security of tenure and due process of law. (Robusta Agro Marine Products, Inc. vs. Gorombalem, G. R. No. 80500, July 5, 1989).

B. Twin Notice Requirement

The employer has the burden of proving that the former worker has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought, and (2) the other to inform him of his employer’s decision to dismiss him.

Contents of First Notice:

a) The first notice must state that dismissal is sought for the act or omission charged against the employee, otherwise, the notice cannot be considered sufficient compliance with the rules (Ace Promotion and Marketing Corporation v. Ursabia, G.R. No. 171703, 2006).

b) The notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice (King of Kings Transport, Inc. v. Mamac, G.R. No. 166208, June 29, 2007).

c) The notice should specifically mention which company rules, if any, were violated and/or which among the grounds under Article 282 is being charged against the employees (R.B. Michael Press v. Galit, G.R. No. 153510, February 13, 2008)

d) Likewise, it should also contain a directive that the employees are given the opportunity to submit their written explanation within a reasonable period (Inguillo v. First Philippine Scales, Inc., G.R. No. 165407, June 5, 2009)

“Reasonable Opportunity”"Reasonable opportunity" under the Omnibus Rules means

every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense.

This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint (King of Kings Transport, Inc. v. Mamac, id.).

Notice Must Be Served at the Employee’s Last Known AddressIn case of termination, the notices shall be served on the

employee’s last known address. (Section 2, Rule I, Book VI, Rules to Implement the Labor Code, as amended by Article III, Department Order No. 10, Series of 1997)

Publication of the notice on a newspaper or its postage at the company bulletin board does not constitute sufficient compliance with statutory requirement. (Agabon vs. NLRC, G.R. No. 158693, Nov. 17, 2004; Shoppers Gain Supermart vs. NLRC, G. R. No. 110731, July 26, 1996; Caingat vs. NLRC, G. R. No. 154308, March 10, 2005)

C. Hearing Requirement

The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to

Article 279 – An employee who is unjustly dismissed from work shall be entitled to REINSTATEMENT, without loss of seniority rights and other privileges and to his FULL BACKWAGES inclusive of allowances, and to his other benefits to their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial-type hearing is not at all times and in all instances essential, as the due process requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack of notice and hearing. (Valiao vs. Hon. CA, G. R. No. 146621, July 30, 2004; Cindy & Lynsy Garment vs. NLRC, 284 SCRA 38 [1998]).

Quantum Of Evidence Required and Burden of ProofAll administrative determinations require only substantial proof

and not clear and convincing evidence. (Segismundo vs. NLRC, G. R. No. 112203, Dec. 13, 1994).

The onus of proving that the employee was not dismissed or if dismissed, that the dismissal was not illegal, rests on the employer and failure to discharge the same would mean that the dismissal is not justified and, therefore, illegal. (Limketkai Sons Milling, Inc. vs. Llamera, G. R. No. 152514, July 12, 2005).

When Hearing Not RequiredIn the situations mentioned below, hearing is not required to be conducted by the employer in order for the termination to be valid.

a. Admission of guilt by employee.b. Termination due to authorized causes under Article 283.c. Termination due to disease under Article 284.d. Termination by the employee (resignation). e. Termination after 6 months of bona-fide suspension of operation.f. Termination due to expiration of fixed-period employment.g. Termination of casual employment. h. Termination due to completion of project in project employment.i. Termination due to lapse of season in case of seasonal employment.j. Termination due to expiration of period of probationary employment.k. Termination due to expiration of tenure made coterminous with lease.l. Termination due to expiration of contractual employment.m. Termination due to abandonment. n. Termination due to closure or stoppage of work by government authorities.

CONSEQUENCES OF DISMISSAL

A) IF DISMISSAL IS LEGAL:

a. As a general rule if the employee is terminated for a just cause he is not entitled to separation pay.

Exception: under the compassionate principle, financial assistance or separation pay may be extended to the dismissed employee.

Exception to the exception: in the case of PLDT v. NLRC (14 SCRA 671) the Supreme Court held that No separation pay is allowed for acts involving:

1. Serious Misconduct2. Causes reflecting his moral character

b. If on the other hand the termination if for an Authorized cause, the employee is entitled to separation pay which shall be computed as follows:

1 month or ½ month pay for every year of service whichever is higher (Art. 283, LC).

B) IF DISMISSAL IS ILLEGAL: note art.279 of LC:

Thus an employee dismissed for any cause which is neither Just nor Authorized as provided in the LC he is entitled to three things:

1) Reinstatement2) Full backwages 3) Damages

1) Reinstatement – is the remedy that most effectively restores the right of an employee to his employment before he was unjustly deprived of his job (Quijano v. Mercury Drug July 8, 1998)

Kinds of Reinstatement

a) Reinstatement to former position [without loss of seniority rights and other privileges] (Art.279 LC)

b) Reinstatement in payroll (Art. 223)

Art. 223 (d) – In any event the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement is concerned, SHALL IMMEDIATELY BE EXECUTORY, EVEN PENDING APPEAL. The employee SHALL EITHER BE ADMITTED BACK TO WORK under the same terms and conditions prevailing prior to his dismissal or separation OR, AT THE OPTION OF THE EMPLOYER, MERELY REINSTATED IN PAYROLL. The posting of a bond by the employer shall not stay the execution for reinstatement provided therein.

Under article 223 of the LC, an award for reinstatement shall be immediately executor even pending appeal and the posting of bond by the employer shall not stay the execution for reinstatement (Pioneer Texturizing Corp. v. NLRC October 16, 1997)

x x x the provision on reinstement pending appeal is in accord with the social justice philosophy of our Constitution. It is meant to afford full protection to labor as it aims to stop x x x a continuing threat of danger to the survival or even the life of the dismissed employee (Quisumbing separate opinion Garcia v. PAL Jan. 20, 2009).

The failure to allege reinstatement as one of the reliefs in the complaint for illegal

dismissal is not fatal. In the interest of justice x x x although the issue of the grandt of separation pay was never contested even at the level of the Labor Arbiter ruling where hew granted petitioner separation pay instead of ordering his reinstatement should be corrected. Reinstatement should be granted although he failed to specifically pray for the same in his complaint (Manipon v. NLRC December 27, 1994)

Where the employee explicitly prayed for separation pay in lieu of reinstatement, he forecloses reinstatement as a relief by implication. Consequently he is entitled to a separation pay equivalent to one month for every year of service, from the time of his illegal dismissal up to the finality of judgment, as an alternative to reinstatement (Solidbank Corp. v. CA August 25, 2003)

2) Backwages – represents the amount of earnings lost by reason of an unjustified dismissal (Quebec Sr. v. NLRC January 22, 1999)

Full backwages, including allowances, other benefits or monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (Art. 279 LC)l

Without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his dismissal (Bustamante v. NLRC 265 SCRA 61)

If the dismissed employee has already reached sixty years of age, the backwages should only cover the time when he was Illegally dismissed up to the time when he reached sixty years. Under article 287 of the Labor Code sixty years is the optional retirement age. (Espejo v. NLRC March 29, 1996)

Where the dismissed employee has reached the compulsory retirement age of sixty-five the award for backwages should be computed up to said age. (St. Michael’s Institute v. Santos December 4, 2001)

As a general rule backwages are paid in full however in one case the supreme court held that:

In view of the respondent employee’s absences that were now wholly justified, he should be entitled to backwages which should be limited to one year (Proctor and Gamble Philippines v. Bondesto March 5, 2004)

Reinstatement v. Backwages

Where reinstatement restores the employee who was unjustly dismissed to the position from which he was removed,

The grant of backwages allows the same employee to cover from the employer that what he had lost by way of wages as a result of his dismissal.

3) Damages

- Moral and Exemplary Damages are recoverable only where the dismissal of the employee was attended by:

a) bad faith or fraud;b) or constituted an act of oppressive to labor;c) or was done in a manner contrary to morals, good

customs or public policy (Audition Electric Co. v. NLRC June 17 1999)

- Nominal Damages on the other hand are to be awarded when there is non-observance of statutory due process.

The violation of the petitioner’s right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court taking into account the relevant circumstances. Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P 30,000.00. (Agabon v. NLRC November 17, 2004)

It is established that JAKA failed to comply with the notice requirement under the same article. Considering the factual circumstances in the instant case and the above ratiocianation, we therefore, deem it proper to fix the indemnity at P 50,000.00

Accordingly it is wise to hold that:

1) If the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; and

2) If the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer’s exercise of his manage prerogative (JAKA Food Processing Corp. v. Darwin Pacot et. al. March 28, 2005).

II. AUTHORIZED CAUSES

The grounds cited in Articles 283 and 284 are technically called the authorized causes for termination of employment. They are:

1. retrenchment; 2. redundancy;3. installation of labor-saving devices;4. closure or cessation of business; and5. disease.

A.RETRENCHMENT: reduction of personnel for the purpose of cutting down the cost of operation in terms of salaries and wages resorted to by the employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of the business.

Requisites:1. The losses expected should be substantial and not merely

de minimis in extent;2. The substantial losses apprehended must be reasonably

imminent;3. The retrenchment must be reasonably necessary and likely

to effectively prevent the expected losses;4. The alleged losses, if already incurred, and the expected

imminent losses sought to be forestalled must be proved by sufficient and convincing evidence (Bonifacio Anino vs. NLRC, May 21, 1998).

Procedural Requirements:1. It must be necessary to prevent losses and the same is

proven;2. The employer shall notify the DOLE and the employee in

writing one month prior the intended date; and3. Payment of separation pay.

Cost reduction measures prior to retrenchment, necessary: Retrenchment is only a measure of last resort when other less drastic means have been tried and found to be wanting, inadequate or insufficient. Cost reduction measures should first be taken prior to retrenchment. (Polymart Paper Industries, Inc. vs. NLRC, G. R. No. 118973, Aug. 12, 1998).

Where the only less drastic measure that the company undertook was the rotation work scheme: the three-day-work per employee per week schedule, the Supreme Court noted that it did not try other measures, such as cost reduction, lesser investment on raw materials, adjustment of the work routine to avoid the scheduled power failure, reduction of the bonuses and salaries of both management and rank-and-file, improvement of manufacturing efficiency, trimming of marketing and advertising costs, and so on. The fact that the company did not resort to other such measures seriously belies its claim that retrenchment was done in good faith to avoid losses (Emco Plywood Corporation vs. Abelgas, G. R. No. 148532, April 14, 2004).

The employer is required to take other measures prior or parallel to retrenchment to forestall losses, i.e., cut other costs than labor costs. An employer who, for instance, lays off substantial number of workers while continuing to dispense fat executive bonuses and perquisites or so-called “golden parachutes”, can scarcely claim to be retrenching in good faith to avoid losses. To impart operational meaning to the constitutional policy of providing “full protection” to labor, the employer’s prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means - e.g., reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of marketing and advertising costs, etc. - have been tried and found wanting. (F. F. Marine Corporation vs. The Honorable Second Division NLRC, G. R. No. 152039, April 8, 2005).

Best evidence of losses - audited financial statements. Financial statements audited by independent external auditors constitute the normal method of proof of the profit and loss performance of a company. (F. F. Marine Corporation vs. The Hon. Second Division NLRC, supra).

Unless duly audited by independent auditors, the financial statements can be assailed as self-serving documents. (Danzas Intercontinental, Inc. vs. Daguman, G. R. No. 154368, April 15, 2005).

Effect of re-hiring of retrenched employees. In Atlantic Gulf and Pacific Company of Manila, Inc. [AG & P], vs. NLRC, [G. R. No. 127516, May 28, 1999], it was contended that the “redundancy program” was actually a union-busting scheme of management, aimed at removing union officers who had declared a strike. This contention, however, cannot stand in the fact of evidence of substantial losses suffered by the company. Moreover, while it is true that the company re-hired or re-employed some of the dismissed workers, it has been shown that such action was made only as company projects became available and that it was done in pursuance of the company’s policy of giving preference to its former workers in the rehiring of project employees. The rehiring or re-employment does not negate the imminence of losses, which prompted private respondents to retrench.

B. REDUNDANCY: that which exists where the services of an employee are in excess of what would reasonably be demanded by the actual requirements of the enterprise.

Requisites:1. Written notice served on both the affected employees and

the DOLE at least one month prior to the intended date of termination;

2. Payment of separation pay equivalent to at least one month pay or to atl least one month pay for every year of service, whichever is higher;

3. Good faith in abolishing the redundant positions; and4. Fair and reasonable criteria in ascertaining what positions

are to be declared redundant and accordingly abolished [such as less preferred status, efficiency and seniority].

***Redundancy does not require proof of losses or imminent losses [Dole Philippines, Inc. vs. NLRC, (GR No. 120009, September 13, 2001).

Redundancy and retrenchment, distinguished

“Redundancy” exists when the services of an employee are in excess of what is required by an enterprise. “Retrenchment” on the other hand, is one of the economic grounds for dismissing employees and is resorted to primarily to avoid or minimize business losses. “Redundancy Program,” while denominated as such, is more precisely termed “Retrenchment” if it was primarily intended to prevent serious business losses (Atlantic Company of Manila, Inc. vs. NLRC, GR No. 127516, May 28, 1999).

Lack of notice to the DOLE does not render the redundancy program void especially if the employee consented to his retrenchment or voluntarily applied for retrenchment with the employer [Dole Philippines, Inc. vs. NLRC, supra).

Abolition of position or department. The abolition of departments or positions in the company is one of the recognized management prerogatives. In the absence of proof that the act of the employer was ill-motivated, it is presumed that it acted in good faith (San Miguel Corporation vs. NLRC, G. R. No. 99266, March 2, 1999).

In valid abolition of positions, the Supreme Court cannot erase that initiative simply to protect the person holding the position (Cosico, Jr. vs. NLRC, G. R. No. 118432, May 23, 1997).

Contracting out of abolished position to independent contractors held valid. The act of the employer of phasing-out its security section and the hiring of an independent security agency to perform its task constitutes a legitimate business decision. Consequently, absent proof that management acted in a malicious or arbitrary manner, the Supreme Court will not interfere with the exercise of judgment by an employer. Indeed, the management of a company cannot be denied the faculty of promoting efficiency and attaining economy by a study of what units are essential for its operation. To it belongs the ultimate determination of whether services should be performed by its personnel or contracted to outside agencies. While there should be mutual consultation, eventually deference is to be made to what management decides (Serrano vs. NLRC, G. R. No. 117040, January 27, 2000).

Reorganization through redundancy, valid. Reorganization as a cost-saving device is acknowledged by jurisprudence. An employer is not precluded from adopting a new policy conducive to a more economical and effective management, and the law does not require that the employer should be suffering financial losses before he can terminate the services of the employee on the ground of redundancy [Dole Philippines, Inc. vs. NLRC, (GR No. 120009, September 13, 2001).

C. INSTALLATION OF LABOR-SAVING DEVICES: installation of machinery to effect economy and efficiency in its method of production.

Requisites:1. The introduction of the machinery, equipment or other

devices must be done in good faith;2. The purpose for such introduction must be valid such as to

save on cost, enhance efficiency and other justifiable economic reasons;

3. There is no other option available to the employer than the introduction of the machinery, equipment or device and the consequent termination of employment of those affected thereby;

4. The 30-day notice requirement should be complied with;5. There should be reasonable and fair standards or criteria in

selecting who to terminate such as nature of work, status of the employee (whether casual, temporary or regular), experience, efficiency rating and seniority, among other considerations; and

6. Separation pay under the law or company policy or CBA or similar contract, when appropriate, must be paid to the affected employees.

***There is no need for the employer to show proof of losses or imminent losses.

Modernization program through introduction of machines. In Abapo vs. CA, [G. R. No. 142405, Sept. 30, 2004], the company (San Miguel Corporation) conducted a viability study of its business operations and adopted a modernization program. It then brought into its Mandaue plant high-speed machines to be used in the manufacture of its beer. The Supreme Court held that the installation of labor-saving devices at its Mandaue plant was a proper ground for terminating employment.

Installation of machines for more economy and efficiency. In Philippine Sheet Metal Workers Union vs. CIR, [83 Phil. 433], the termination of employment of the affected employees due to the introduction of machinery in the manufacture of its products for purposes of effecting more economy and efficiency, was declared valid.

D. CLOSURE OF BUSINESS: the reversal of fortune of the employer whereby there is a complete cessation of business operations to prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped (Alabang Country Club Inc., et al. vs. NLRC, August 9, 2005).

Requisites:1. The decision to close or cease operations should be made

in good faith;2. The purpose should not circumvent the provisions of the

Labor Code;

(Nota Bene: If the ground is serious business losses or financial reverses, there should be clear proof thereof since no separation pay to the employees is required to be paid under the law, if such cause is invoked. If not due to serious business losses, this requisite becomes relevant.)

3. There is no other option available to the employer except to close or cease operations;

4. The notice requirement should be complied with, whether or not the closure or cessation of operations is due to serious business losses or financial reverses;

5. Separation pay (when not due to serious business losses) or company policy or CBA or similar contract, when appropriate, must be paid to the affected employees.

***The relocation of employer’s plant to Batangas amounts to cessation of its business operations in Makati. Closure or cessation of operation of an establishment or undertaking not due to serious business losses or reverses under Article 283 of the Labor Code includes both the company business. The Court considered the transfer as closure not due to serious business losses for which the workers are entitled to separation pay (Cheniver Deco Print Technics Corporation vs. NLRC, GR No. 122876, February 17, 2000)

***The determination to cease operation is a management prerogative that the State does not usually interfere in. Indeed, no business can be required to continue operating at a loss, simply to maintain the workers in employment. That would be taking of property without due process of

law. But where it is manifest that the closure is motivated not by a desire to avoid further losses, but to discourage the workers from organizing themselves into a union for more effective negotiation with management, the State is bound to intervene (Me-Shurn Corporations vs. Me-Shurn Workers Union-FSM, GR No. 156292, January 11, 2005)

Absence of notice does not render the dismissal ineffectual, defective or illegal. In Agabon, vs. NLRC, [G. R. No. 158693 November 17, 2004], the Supreme Court ruled that dismissal for authorized cause but without complying with the notice requirement does not make the dismissal illegal or ineffectual. The dismissal remains valid and legal but the employer is made to pay an indemnity in the form of nominal damages for non-compliance with the procedural requirements of due process.

Failure to observe 30-day prior notice rule, effect per Agabon case. In the 2005 case of Cajucom VII vs. TPI Philippine Cement Corporation, [G. R. No. 149090, February 11, 2005], it was ruled that a notice served on the employee to be retrenched and to the DOLE three (3) days short of the 30 days required by law is procedurally defective. However, while this infirmity cannot be cured, it should not invalidate the dismissal. Consequently, the employer should be held liable in the amount of P20,000.00 as nominal damages for non-compliance with the procedural requirements of due process.

In another 2005 case, Philippine Telegraph & Telephone Corporation vs. NLRC, [G. R. No. 147002, April 15, 2005], the Supreme Court held that while the employer’s failure to comply with the one-month notice requirement prior to retrenchment does not render the termination illegal, it, however, renders the same defective, entitling the dismissed employee to payment of indemnity in the form of nominal damages. Based on prevailing jurisprudence, the amount of indemnity is pegged at P30,000.00.

Notice should be served to employees themselves. A notice sent to the foremen, the section heads, the supervisors and the department heads instructing them to retrench some of the workers based on certain guidelines is not the required notice contemplated by law. The written notice should be served on the employees themselves, not on their supervisors. (Emco Plywood Corporation vs. Abelgas, supra).

Notice to DOLE need not be complied with in case of voluntary personnel reduction program. Well-settled is the rule that notice to the DOLE need not be complied with if the termination of employment under Article 283 was made voluntarily by the employees pursuant to a valid personnel reduction program.

In a subsequent 2001 case, the lack of notice to the DOLE, according to the Supreme Court in Dole Philippines, Inc., vs. NLRC, [G. R. No. 120009, September 13, 2001], does not render the voluntary redundancy program void. Petitioner accurately invoked the case of International Hardware [supra]. Here, most of the private respondents even filled up application forms to be considered for the redundancy program and thus acknowledged the existence that their services were redundant.

In another 2001 case, Santos vs. CA, Pepsi-Cola Products Phils., Inc., [G. R. No. 141947, July 5, 2001], the same

ruling in International Hardware [supra] that the mandated one (1) month notice prior to termination given to the worker and the DOLE is rendered unnecessary by the consent of the worker himself, was cited. Petitioners assail the voluntariness of their consent by stating that had they known of PEPSI’s bad faith, they would not have agreed to their termination, nor would they have signed the corresponding releases and quitclaims. Having established private respondent’s good faith in undertaking the assailed redundancy program, there is no need to rule on this contention.

Retrenchment and closure of business, distinguished

Closure of business, on one hand, is the reversal of fortune of the employer whereby there is a complete cessation of business operations and/or an actual locking-up of the doors of establishment, usually due to financial losses. Closure of business as an authorized cause for termination of employment aims to prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped. On the other hand, retrenchment is reduction of personnel usually due to poor financial returns so as to cut down on costs of operations in terms of salaries and wages to prevent bankruptcy of the company. It is sometimes also referred to as down-sizing. Retrenchment is an authorized cause for termination of employment which the law accords an employer who is not making good in its operations in order to cut back on expenses for salaries and wages by laying off some employees. The purpose of retrenchment is to save a financially ailing business establishment from eventually collapsing (J.A.T. General Services vs. NLRC, G. R. No. 148340, January 26, 2004].

E. DISEASEArticle 284 requires that the employer shall not terminate the

service of the employee suffering from any disease unless there is a certification by a competent public health authority that the disease is incurable within a period of six months even with proper medical treatment.

Requisites:

1. the employee is suffering from a disease;

2. his continued employment is either:

a. prohibited by law; or

b. prejudicial to his health; or

c. prejudicial to the health of his co-employees;

3. there is a certification by a competent public health authority that the disease is of such nature or at such stage that it cannot be cured within a period of six (6) months even with proper medical treatment;

4. notice of termination based on this ground should be served to the employee; and

6.separation pay shall be paid to him in the amount equivalent to at least one (1) month salary or to one-half

(1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.

***Burden of proof rests on the employer.

***Company physician is not a “competent public health authority.”

***Medical certificate issued by company doctor is not sufficient.

No hearing required in case of termination due to disease. Being an authorized cause, as distinguished from just cause, hearing is not necessary to be conducted by the employer prior to the termination of employment of the sick employee.

Medical certificate, an indispensable requisite. In the absence of the required certification by a competent public health authority, the Supreme Court has consistently ruled against the validity of the employee’s dismissal. (Cruz vs. NLRC, G. R. No. 116384, Feb. 7, 2000).

Medical certificate issued by company doctor, not acceptable. A medical certificate issued by a company’s own physician is not an acceptable certificate for purposes of terminating an employment based on Article 284, it having been issued not by a “competent public health authority,” the person referred to in the law. (Cebu Royal Plant [San Miguel Corporation] vs. Hon. Deputy Minister of Labor, G. R. No. 58639, Aug. 12, 1987, 153 SCRA 38 [1987]).

The certificate should be procured by the employer. It devolves upon the employer the obligation to obtain a certificate from a competent public authority that the employee’s disease is at such stage or of such nature that it cannot be cured within six (6) months even with prior medical treatment. It is the employer, and not the employee, who has the burden of proof to justify that the termination was supported by said certificate. Clearly, it is only where there is such prior certification that the employee could be validly terminated from his job. (Tan vs. NLRC, G. R. No. 116807, April 14, 1997, 271 SCRA 216; See also Phil. Employ Services and Resources, Inc. vs. Paramio, G. R. No. 144786, April 15, 2004; Sy vs. CA, supra).

NOTE:

Separation pay in cases of installation of labor-saving devices or redundancy.

An employee is entitled to termination pay equivalent to at least his one (1) month pay or at least one (1) month pay for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one (1) whole year, in case his termination is due to the installation of labor-saving devices or redundancy. (See also Section 9 [a], Rule I, Book VI, Rules to Implement the Labor Code).

Separation pay in cases of retrenchment or closure not

due to serious business losses or disease.

The employee is entitled to separation pay equivalent to one (1) month pay or at least one-half (½) month pay for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one (1) whole year where the termination of employment is due to either:

a. retrenchment to prevent losses; or

b. closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses; or

c. disease under Article 284. (See also Section 9 [b], Rule I, Book VI, Rules to Implement the Labor Code).

SUSPENSION ( Article 286 )

A. The following are the situations under Article 286 of the Labor Code which states that the employment of the employee is not deemed terminated:

Under Article 286, the following are contemplated therein:

1. Bona-fide suspension by the employer of the operation of his business or undertaking for a period not exceeding 6 months;

The employer may validly suspend his business operation for a period of less than 6 months.

2. Fulfillment by the employee of a military duty;3. Fulfillment by the employee of a civic duty.

B. What would be the extent of the bona-fide suspension of operations for the period not exceeding 6 months?

The extent may involve only a section or department of the company not necessarily the entire company.The burden to prove bona-fide suspension of operation is on the employer.

C. Suspension of operation prior to closure, held as evidence of good faith.

In the case of J.A.T. General Services vs. NLRC (G.R. No. 148340. Jan. 26, 2004), it was ruled that the closure of business operation was not deemed tainted with bad faith because the decision to permanently close the business was arrived at, among others, after the suspension of operation for several months precipitated by slowdown in sale without any prospects of improving.

D. Compensation of employees during the six-month suspension.

Employees are not entitled to their wages and benefits during the period of suspension. The reason is that the employer- employee relationship is also deemed suspended. The employment relationship being suspended, both the employer and the employees ceased to be bound, at least temporarily, by the basic terms and conditions of their employment contract (the employer with his obligation to provide salary and the employee to provide their services to the employer).

E. What is the effect if the suspension exceeds 6 months?

In the case of Mayon Hotel & Restaurant vs. Adana (G.R. No. 157634, July 8, 2005), it was held that Article 286 is clear- there is termination of employment when an otherwise bona-fide suspension of work exceeds 6 months. Moreover, even assuming that the cessation of employment was merely temporarily when the hotel operations were suspended due to the termination of the lease of the old premises, it became dismissal by operation of law when petitioner failed to reinstate respondents after the lapse of 6 months period. And even assuming that the closure was due to a reason beyond the control of the employer, it still has to accord its employees some relief in the form of severance pay.

F. What is the effect of employment of employee in other establishments during 6 months period?

In the case of JPL Marketing Promotions vs. CA, (G.R. No. 151966, July 8, 2005), it was established that private respondent-employees sought employment from the other establishment even before the expiration of the period provided for by law. They admitted that all of them applied for and were employed by another after they have received the notice from JPL. It was held that JPL cannot be said to have terminated their employment for it was they themselves who severed their relationship with JPL. Thus, they are not entitled to separation pay. Clearly, the principle in the law which grants separation pay applies only when the employee is dismissed by the employer, which is not the case in this instance. In seeking and obtaining employment elsewhere, private respondents effectively terminated their employment with JPL.

G. Suspension of operations; “FLOATING STATUS”

Temporary “off-detail” or “Floating Status” as applied to security guards, refers to the period of time they are made to wait until they are assigned or transferred to a new post or client. It does not constitute constructive dismissal as their assignments primarily depend on the contracts entered into by the security agency with third parties. (Philippine Industrial Security Agency Corp. vs. Dapiton, G.R. No. 127421, Dec. 8 1999)

It was held that when a security guard is placed on “off-detailing” or “floating status,” in security parlance, it means “waiting to be posted.” Consequently, a relief or transfer order to itself does not severe employment relationship between the security guards and the agency. And the mere fact that the transfer would be inconvenient for her does by itself make her transfer illegal. (Mobile Protective & Agency vs. Ompad, G.R. No. 059195, May 9, 2005)

Under Article 286 of the Labor Code, a bona-fide suspension of the operation of the business or undertaking for the period not exceeding 6 months, or the fulfillment by the employee of a military or civic duty does not terminate employment. Under this provision, when a bona fide suspension of operation or undertaking exceeds 6 months, then the employment of the employee shall be deemed terminated. Thus, he is considered to be illegally dismissed from employment. Hence, he is entitled to corresponding benefits for his separation and this will apply to the 2 kinds of suspension, that is, either of the entire business or of a specific component thereof.

“Off-detailing” is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time. (Agro Commercial Security Services Agency, Inc. vs. NLRC, 175 SCRA 790)

IX.

Art. 136. STIPULATION AGAINST MARRIAGEIt shall be unlawful for the employer to:1. Require as a condition of employment or continuation of employment that a woman employee shall not get married2. To stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated3. To actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage

An employer’s policy of not accepting a married applicant or dismissing female employee who contracts marriage, is discriminatory against women and, therefore, illegal. The illegality is not cured by the employee’s conformity to such policy or contract stipulation.

Neither may a woman worker be dismissed on the ground dishonesty.

PT&T Co. v. NLRC, 272 SCRA 596 (May 23, 1997)A woman may not be dismissed on the ground of

dishonesty for having written “single” on the space for civil status on the application sheet, contrary to the fact that she was married. However, non-marrige, as a condition for continued employment, is a bona fide occupational qualification if justified by a business necessity. (Business Necessity Rule, Reasonabless Test)

ZIALCITA, et al v. PAL ( Feb.27, 1977)

Issue: Whether or not the determination of the services of complainant on account of marriage is legal.Art. 136 is not intended to apply only to women employed in ordinary occupations, or it should have categorically expressed so. The sweeping intendment of the law, be it on special or ordinary

occupations, is reflected in the whole text and supported by Art. 135 that peaks of nondiscrimination on the employment of women.THE STAR PAPER CASE (April 12, 2006)(Disparate treatment v. Disparate impact)

A company policy which requires either male or female employee to resign upon marriage to the other does not violate Art. 136. It does not directly discriminate against the female employee by reason of marriage. It does not single out the female worker. This notwithstanding, the policy is still void under the full protection clause because if its discriminatory or disparate impact on the female employee. If the latter quits her employment pursuant to that policy, her quitting amounts to illegal dismissal. If said policy specifically requires the wife to resign then it amounts to disparate treatment, hence, void under Art. 136. The quitting amounts to illegal dismissal.

Disparate treatment is the practice of employers of directly discriminating against women by reason of marriage as when the former adopt a no-marriage employment policy without any legitimate business necessity therefore.

Disparate impact is indirectly discriminating against women by reason of marriage as when an employer adopts a “no-couple employment policy” with option to decide who between the man and the woman employed in the same company must resign after they get married. This amount to marital status discrimination and its impact is still discriminatory against the wife by reason of marriage. Both disparate treatment and disparate impact constitute discrimination against women by reason of marriage even in the absence of a law prohibiting “no-couple in one company” employment policies.

GLAXO RULING: A policy in a pharmaceutical company prohibiting inter-marriage between its employees and employees of a competitor company is a valid exercise of management prerogative. Companies have the right to protect their trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors.

What is a marital status discrimination policy or no-couple policy?Is one under which employment or continued employment is conditioned on possession by a worker of single status.

What if, any, is the basis under the Constitution for adopting it?If the policy serves a demonstrable or proven business necessity, in which case single status is a bona fide occupational qualification, its constitutional bases would be Sec.3, art. XIII which gives employers the right to prescribe reasonable rules, as part of management prerogative, in the exercise of their constitutional right to reasonable return on their investment, and to expansion and growth.

ART. 137. PROHIBITED ACTSIt shall be unlawful for any employer:1. To deny any woman employee the benefits provided in this chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under the Code;2. To discharge such woman n account of her pregnancy, or while on leave or in confinement due to her pregnancy;3. To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant.

A female worker, dismissed on the ground of absenteeism, was found illegally dismissed by reason of her pregnancy. Although her medical certificate indicated dates that did not conform to the dates of her actual absences, the SC found out the discrepancies insufficient to overcome the finding that said absences were pregnancy-related. If so then her dismissal by reason of her absences was by reason of her pregnancy. (2007 Ruling)

VII RIGHT TO CONTEST DISMISSAL, BURDEN OF PROOF AND QUANTUM OF EVIDENCE REQUIRED

Burden of Proof:

In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid cause.

Where the termination cases involve all Filipino workers recruited and deployed to overseas employment, the burden of proof devolves upon both the foreign-based employer and the employment agency or recruitment entity which recruited the worker, for the latter is not only the agent of the former, but is also solidarily liable with the foreign principal for only claims or liabilities arising from dismissal of the worker. (Royal Crown International vs. NLRC, G.R. No. 78085, October 16, 1989)

Jurisprudence:

In termination cases, the burden is upon the employer to show by substantial evidence was for lawful cause and validly made. Article 277 of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an employee’s dismissal to be valid, (a) the dismissal for a valid cause and (b) the employee must be afforded due process. ( Vicente Sy vs. CA, G.R. No. 142293, February 27, 2003).

The burden of proving the validity of the dismissal of the employee rests on the employer. It is therefore incumbent upon him to prove by the quantum of evidence required by law that the dismissal of an employee is not illegal; otherwise the dismissal would be unjustifiable. ( Bolinao Security and Investigation vs. Arsenio Toston, January 29,2004)

In an unlawful dismissal case, employer has the burden of proving the lawful cause causing the dismissal of the employee. (Dizon vs. NLRC, GR No. 79554, December 14, 1989)

Quantum of Evidence required:

Substantial evidence is required which is more than mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. (Ang Tibay vs. CIR, 69 Phil 635)

The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. (Dizon vs. NLRC, GR No. 79554, December 14, 1989)

Preliminary, the Labor Code provides that an employer may terminate th4 services of an employee for just cause and this must be supported by substantial evidence. The settled rule in administrative and quasi-judicial proceedings is that the proof beyond reasonable doubt is not required in determining legality of an employers dismissal of an employee, and not even preponderance of evidence is necessary as substantial evidence is considered

sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. Thus substantial evidence is the least demanding in the hierarchy of evidence. (Salvador vs. Phil. Mining Company)

EMPLOYER'S RIGHT TO DISMISS EMPLOYEES

Types of Employees

Art. 280 of the LC provides for the following categories of employment:

Project - where the employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee;

Seasonal - where the work or services to be performed is seasonal in nature and the employment is for the duration of the season; and

Casual - where the employment is not covered by the foregoing, provided that an employee who has rendered at least one year of service, whether continuous or broken, shall be considered regular with respect to the activity in which he or she is employed and his or her employment shall continue while the activity exists.

Another category of employment recognized in jurisprudence is “term” or “fixed-period employment.” This is based on art. 1193 of the CC, which states that obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain – understood to be a day that must necessarily come. The decisive determinant in “term employment” should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of the employment relationship.[8]Stipulations in employment contracts providing for “term employment” or “fixed-period employment” are valid when the period has been agreed upon knowingly and voluntarily by the parties, without force, duress or improper pressure exerted on the employee, and when such stipulations were not designed to circumvent the laws on security of tenure. Probationary employment is not necessarily a category of employment. It pertains to a period of time. Under art. 281 of the LC, probationary employment shall not exceed six (6) months. An employee who is allowed to work after a probationary period shall be considered a regular employee. A probationary employee is, for a given period of time, under observation and evaluation to determine whether or not he or she is qualified for permanent employment. During the probationary period, the employer is given the opportunity to observe the skills, competence and attitude of the employee while the latter seeks to prove to the employer that he or she has the qualifications to meet the reasonable standards for permanent employment.

Termination of Employees

An equality of rights exists between employer and employee. While the employer cannot force the employee to work against his or her will, neither can the employee compel the employer to continue giving him or her work if there is a lawful reason not to do so. Thus, the employer may terminate the services of an employee for just or authorized causes after following the procedure laid down by law, but

the employer has the burden of proving the lawfulness of the employee’s dismissal in the proper forum.

Just causes are blameworthy acts on the part of the employee such as serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or willful breach of trust, commission of a crime and other analogous causes (art. 282, LC).

Authorized causes are of two types – business reasons and disease. The business reasons are installation of labour-saving devices, redundancy, retrenchment and closure or cessation of operation (art. 283, LC).

Difference between a Just and Authorized Cause of Termination

Just cause refers to a wrong doing committed by the employer or employee on the basis of which the aggrieved party may terminate the employer-employee relationship.

Serious misconduct– has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment (Alma Cosep vs. NLRC, June 1998).

Requisites:1. Must be serious2. Must relate to the performance of the employer’s duty3. Must show that the employee has become unfit to

continue working for the employer (Roquero vs. PAL).

Willful disobedience- insubordination of an employee is not always punishable with dismissal. There must be a reasonable proportionality between the act of insubordination and the penalty imposed therefore (Gold City Integrated Port Services vs. NLRC, 189 SCRA 811).

Requisites:1. Employee’s conduct must be willful and intentional2.Oder violated must be

a. reasonable and lawfulb. known to the employeesc. must pertain to the employee’s duty

Gross Negligence- has been defined as the want or absence of or failure to exercise slight care or diligence or entire absence of care (National Bookstore vs. CA)

Requisites:1. Want or absence of or failure to exercise slight care or

diligence, or the entire absence of care.2. It evinces a thoughtless disregard of consequences

without exerting any effort to avoid them.3. The negligence should not only be gross but must

also be habitual. (Phil. Aelous Automotive Copy vs. NLRC)

Fraud or breach of trust by the employee- refers to any fault or culpability on the part of the employee in the discharge of his duty rendering him absolutely unworthy of the trust and confidence demanded by his position (International Rice Research Institute vs. NLRC, 221 SCRA 760).

Requisites:

1. The loss of trust must be based on a willful breach2. A breach is willful if it is done intentionally, knowingly

and purposely without justifiable cause.3. Loss of confidence is premised on the fact (Roberto

Gonzales vs. NLRC and Pepsi Cola GR 131653, 26 March 2001).

Other analogous causes- must have an element similar to those found in the specific causes enumerated under Article 282 of the Labor Code. Some of those causes are abandonment, immorality, inefficiency, absenteeism and tardiness and unreasonable behavior.

Abandonment

Requisites:1. Employee failed to report for work without justifiable

reason2. Clear intention to severe the employment manifested

by some overt act.

Immoral Conduct- that conduct which is so willful, flagrant or shameless as to show indifference to the opinion of good and respectable members of the community. Furthermore, such conduct must not only be immoral, but grossly immoral. It must be so corrupt or reprehensible to a high degree or committed under such scandalous or revolting circumstances as to shock the common sense of decency.Sleeping on the job- may be a valid ground to dismiss in instances where the work of the employee, such as security guards, necessitates that he be awake and watchful at all times inasmuch as his function is to protect the company from pilferage (VH Manufacturing Inc. vs. NLRC, January 19, 2000)

An Illegal Strike can be cause for Termination of Employment

Just Causes for Termination by the Employee Himself

Just causes (art 285 B, LC):

Serious insult by the employer or his or her representative on the honor and person of the employee;Inhuman and unbearable treatment accorded the employee by the employer or his or her representative;Commission of a crime by the employer or his or her representative against the person of the employee or any of the immediate members of his or her family; andOther analogous causes.

Without cause:

Resignation without cause- If the resignation is without cause, the employee is required to give a 30-day advance written notice to the employer, to enable the employer to look for a replacement to prevent work disruption. If the employee fails to give a written notice, he or she runs the risk of incurring liability for damages.

Authorized cause refers to a cause brought about by changing economic or business conditions of the employer.

Retrenchment – is the reduction of personnel for the purpose of cutting down cost of operation in terms of salaries and wages because of losses in operation.

Requirements:

1. Necessary to prevent losses and same is proven;2. Written notice to DOLE and employee one month prior

to intended date;3. Payment of separation pay.

Requisites:1. Substantial losses;2. Losses must be reasonably imminent;3. Retrenchment is necessary to prevent said loss;4. With convincing evidence.

Proof of actual or imminent financial losses that are substantive in character must be proven to justify retrenchment.

Redundancy – exists where services of an employee are in excess of what would reasonably be demanded by actual needs of the company.

Requisites:1. Good faith in abolishing the redundant position;2. Fair and reasonable criteria in selecting the

employees to be dismissed, such as but not limited to less preferred status (e.g. temporary employee), efficiency and seniority.

3. One-month prior notice is given to the employee as prescribed by law.

Proof of Financial losses is NOT necessary to justify redundancy. In redundancy, the existing manpower of the establishment is in excess of what is necessary to run its operation in an economical and efficient manner.

Installation of Labor-Saving Devices – the installation of machinery to effect economy and efficiency in its method of production. The law does not require that the employer is suffering losses (Dole vs. NLRC September 13, 2001)

Closure of Business under Article 283 – it is due to business losses or reversal of fortune of the employer.

Disease – The employer may terminate employment on ground of disease only upon the issuance of a certification by a competent public health authority that the disease is of such nature or at such stage that it cannot be cured within a period of six months even with proper medical treatment (art. 284, Labor Code; Implementing Rules of Book VI, Labor Code).

Due Process in the Context of Termination of Employment

Due process means the right of an employee to be notified of the reason for his or her dismissal and, in case of just causes, to be provided the opportunity to defend himself or herself.

Failure to comply with the due process requirements will NOT invalidate a dismissal with an otherwise established just or authorized cause. The employee, however, will be entitled to backwages from the time of termination till finality of the decision confirming the presence of a just or authorized cause.

Components of Due Process in Termination Cases

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

1. A notice of intent to dismiss specifying the ground for termination, and giving to said employee reasonable opportunity within which to explain his or her side;

2. 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;

3. A notice of dismissal indicating that upon due consideration of all the circumstances, grounds have been established to justify the termination.

In a termination for an authorized cause, due process means:

1. A written notice of dismissal to the employee specifying the grounds given, at least 30 days before the date of termination.

2. A copy of the notice shall be furnished the Regional Office of the Department of Labor and Employment of the Philippines (DOLE).

An employee who voluntary resigns from employment is not entitled to separation pay.

Exceptions:1. If there is a stipulation in the CBA2. It is an established employer policy3. If there is basis in precedents (Hinatuan Mining Corp

vs. NLRC Febrauary 21, 1997).

Separation Pay

In authorized cause terminations, separation pay is the amount given to an employee terminated due to retrenchment, closure or cessation of business or incurable disease. The employee is entitled to receive the equivalent of one month pay or one-half month pay, whichever is higher, for every year service.

In terminations without just cause, separation pay is also the amount given to employees who have been dismissed without just cause and could no longer be reinstated.

Reinstatement is not possible:1. When company operations have ceased;2. When the employee’s position or an equivalent thereof

is no longer available;3. When the illegal dismissal case has engendered

strained relations between the parties, in cases of just causes and usually when the position involved requires the trust and confidence of the employer;

4. When a substantial amount of years have lapsed from the filing of the case to its finality.

Compassionate Justice Rule

In instances where the just cause for dismissal is other than serious misconduct or moral turpitude, the employee may be awarded Financial Assistance in the amount of one month’s pay as a form of compassionate justice.

Consequences of Dismissal

If dismissal is Legal – No separation pay if terminated for just causes except under compassionate justice principle.

Exception:

Serious misconduct or causes reflecting on his moral character

If dismissal is Illegal- The employee is entitled to:

1. Reinstatement or restoration of the employee to the position from which he or she has been unjustly removed or in the payroll except when the position is abolished, employer ceased operation, strained relationship between employer and employee ;Reinstatement

Reinstatement without loss of seniority rights means that the employee, upon reinstatement, should be treated in matters involving seniority and continuity of employment as though he or she had not been dismissed from work.

When a Labor Arbiter rules for an illegal dismissal, reinstatement is immediately executory even pending appeal.

Forms in which reinstatement be effected:Reinstatement may be actual or payroll in nature,

at the option of the employer.

2. Back wages or the amount of earnings lost by reason of an unjustified dismissal;

Full Backwages refer to all compensations, including allowances and other benefits with monetary equivalent, which should have been earned by the employee but was not collected by him or her because of unjust dismissal. It includes all the amounts he or she could have earned starting from the date of dismissal up to the time of reinstatement.

In cases of illegal dismissal, a dismissed employee who has found another job may still be entitled to collect full backwages from his or her former employer. Full backwages is a form of penalty imposed by law on an employer who illegally dismisses his or her employee. The fact that the dismissed employee may already be employed and earning elsewhere does not extinguish the penalty.

The former position of the employee no longer exists at the time of reinstatement

In that case, the employee shall be given a substantially equivalent position in the same establishment without loss of seniority rights and to backwages from the time compensation was withheld up to the time of reinstatement.

Employee Benefits when the Establishment no longer exists

When an establishment no longer exists at the time an order for reinstatement is made the employee can claim benefits. The employee is entitled to a separation pay equivalent to at least one-month pay or at least one month pay for every year of service whichever is higher, a fraction of at least six months shall be considered as one whole year. The period of service is deemed to have lasted up to the time of closure of the establishment. He or she may also claim backwages to cover the period between dismissal from work and the closure of the establishment.

3. Damages.

Constructive dismissal – is an involuntary resignation which includes:1. Continued employment is rendered impossible;2. Clear discrimination;3. Insensibility or disdain of the employer becomes

unbearable on the part of the employee

An Employee may Question the Legality of his or her Dismissal

A dismissed employee may still question the validity or legality of his or her dismissal by filing a complaint for illegal or unjust dismissal before the Labor Arbiter of the National Labor Relations Commission (NLRC) of the Philippines.

In establishments with a collective bargaining agreement (CBA), the dismissal may be questioned through the grievance machinery established under the CBA. If the issue is not resolved at this level, it will be submitted to voluntary arbitration.

Proving the Dismissal is Legal

In a case of illegal dismissal, the employer has the burden of proving that the dismissal is legal.

Grounds for an Employee to Question his or her Dismissal

An employee may question his or her dismissal based on substantive or procedural grounds.

The Substantive aspect pertains to the absence of a just or authorized cause supporting the dismissal.

The Procedural aspect refers to the notice of termination or the opportunity to present an explanation.

Reasonable period for an Employee subjected to Dismissal to answer charges against him or her by the Employer.

A reasonable period should be provided wherein the employee can answer all the charges against him or her, gather evidence and confront the witnesses against him or her. It should include the opportunity to secure the assistance of a representative who could be a union officer. Reasonableness of the period should be based, among others, on the gravity of the charges against the employee.

During the pendency of the termination case, an employee may be retained in his or her work.

Preventive suspension

An employee may be retained in his or her work even during the pendency of a termination case under the following circumstances:

1. Upon serving the preventive suspension period of 30 days; and

2. Upon management prerogative allowing the employee to be retained at work and his or her continued employment poses no serious nor imminent threat to the life or property of the employer or his or her co-employees.

An employee charged with an offense may be placed under preventive suspension while he or she is preparing to answer charges filed against him or her by the employer

Only on grounds that his or her continued presence inside the company premises poses a serious imminent threat to the life or property of the employer or his or her co-workers, and only for a period of 30 days may be placed under preventive suspension. After 30 days, the employee should be reinstated to his or her former position or in a substantially equivalent position.

The employer, however, may extend the period of suspension provided that the employee is paid his or her wages and other benefits during the extension. If the employer decides to dismiss the employee after completion of the investigation, the employee is not bound to reimburse the amount paid to him or her during the extended period. The employer is required to immediately notify the employee in writing of a decision to dismiss him or her stating clearly the reasons for the dismissal.

Preventive suspension is not a disciplinary measure, and should be distinguished from suspension imposed as a penalty.

Power to Dismiss Not Absolute

The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay off an employee for just and authorized causes enumerated under Articles 282 and 283 of the Labor Code of the Philippines.

However, the right of an employer to freely discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power. This is so, because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits. (Manila Electric Company vs. National Labor Relations Commission, G.R. No. 78763, July 12, 1989)

The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee, because it affects not only his position, but also his means of livelihood. Employers should, therefore, respect and protect the rights of their employees, which include the right to labor. (Rance, et al. vs. National Labor Relations Commission, G.R. No. 68147, June 30, 1988)

Thus, where the employee's dismissal was not based on any of the grounds provided in the contract of employment, but because the employer's personnel manager resented the act of the respondent of writing memos calling the manager's attention to the problems in the camp site and furnishing copies of said memos to government agencies and the Office of the President of the Philippines, which act the employer perceived as detrimental to its interest, the dismissal was held unjustified. (Trans-Orient Overseas Contractors, Inc. vs. National Labor Relations Commission, G.R. No. 75602, Dec. 29, 1989)

Similarly, the dismissal of an employee without any investigation having been previously conducted by the employer to ascertain his participation in the fistfight within company premises, is illegal for non-compliance with the requirements of procedural due process.(Broadway Motors, Inc. vs. National Labor Relations Commission, G.R. No. 78382, Dec. 14, 1987)

As Mr. Justice Panganiban, in an en banc decision, states: To constitute a completely valid and faultless dismissal, it is well-settled that the employer must show not only sufficient ground therefor, but it must also prove that it observed procedural due process by giving the employee two notices: one, of the intention to

dismiss, indicating therein his acts or omissions complained against, and two, notice of the decision to dismiss; and an opportunity to answer and rebut the charges against him, in between such notices. (MGG Marine Services, Inc., et al. vs. NLRC and E.A. Molina, G.R. No. 114313, July 29, 1996)

XI. EMPLOYMENT NOT DEEMED TERMINATEDA. Bonafide Suspension of Business

ART. 286. When employment not deemed terminated. - The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty.

Instances when employment is not deemed terminated:1. Temporary suspension of operations for repair of

machineries or for inventory2. Fulfillment by the employee of military duty3. Fufillment by the employee of civic duty

JURISPRUDENCE:International Hardware,Inc. v. NLRC (Aug. 10, 1989) –

When bonafide suspension of the operation of a business or undertaking exceeds six (6) months, the employment of the employee shall be terminated.

J. A. T. General Services, et al. v. NLRC (Jan. 26, 2004) – A Bonafide suspension of the operation on business for a period not exceeding 6 months does not terminate employment and no notice (of termination) need be given to the employee or to DOLE.

Sebuguero, et al. v. NLRC, GTI Sportswear Corp., et al. (September 27, 1995) – Art. 286 is construed as an instance of temporary retrenchment (Art. 283) or lay-off.

B. FLOATING STATUS OF EMPLOYEE- Floating status not exceeding six (6) months

does not amount to dismissal- Floating status beyond 6 months constitutes

illegal dismissal

JURISPRUDENCE:Agro Commercial Security Services, Agency, Inc. v. NLRC

(July 31, 1989) – Security guards put on “floating status” after the security agency’s contracts with various corporations and government agencies to which respondent security guards were previously assigned had been terminated for a perios longer than 6 months may be considered to have been constructively dismissed for the service.

Sentinel Security Agency, Inc. v. NLRC (Sept. 3, 1998) and Phil. American Life Insurance Co. v. NLRC (Sept. 3, 1998) – A floating status requires the dire exigency of the employer’s bona fide suspension of operation, business or undertaking.

C. OTHER INSTANCES WHEN THERE IS NO COMPLETE SEVERANCE OF EMPLOYEMENT RELATIONSHIP:

- Preventive suspension of employee

- Art 263. STRIKE/LOCKOUT – constitute temporary stoppage of work only- On leave without pay employees –

those put on work pool

CLASSIFICATION OF EMPLOYEES AND GROUNDS FOR THEIR DISMISSAL

Classification of Employees Who are they? Grounds for Termination

Regular the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.

the employee has rendered at least one year of service, whether such service is continuous or broken, with respect to the activity in which he is employed and his employment shall continue while such activity exists

the employee is allowed to work after a probationary period.

Just Causes or

Authorized Causes

NOTE:

Regular employees are legally entitled to remain in the service of their employer until that service is terminated by one or another of the recognized modes of termination of service under the Labor Code . (Magcalas vs. NLRC, supra; ALU-TUCP vs. NLRC, 234 SCRA 678).

Project the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee.

The services of project employees are coterminous with the project and may be terminated upon the end or completion of the project for which they were hired. (Magcalas vs. NLRC, supra; ALU-TUCP vs. NLRC, 234 SCRA 678).

BUT the project employee can be terminated even before the end of the contract for JUST and AUTHORIZED causes

NOTE: the termination or completion of which has been determined at the time of the engagement of the employee.

Seasonal the work or service to be performed by the employee is seasonal in nature and the employment is for the duration of the season

Employment legally ends upon the completion of the season (Mercado V NLRC, 201 SCRA 322)

OR

For JUST and AUTHORIZED causes.

Casual not in the nature of a regular, project or seasonal employment as these kinds of employment are defined under Article 280 of the Labor Code

an employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of engagement

After the expiration of the term indicated in the contract.

OR

For JUST and AUTHORIZED causes.

Probationary the employee is on trial by an employer during which the employer determines the qualification of the

Under Article 281, a probationary employee may be terminated on two (2) grounds, to wit:

employee for regular employment a. for a just cause; or b. when employee fails to qualify as a

regular employee in accordance with reasonable standards made known by the employer to the employee at the start of the employment. (Aberdeen Court, Inc. vs. Agustin, Jr., G. R. No. 149371, April 13, 2005).