Labor Notes Disini1

1


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

TERMINATION OF EMPLOYMENT

GENERAL CONCEPTS CONSTITUTIONAL FOUNDATION FOR THE RIGHTS OF LABOR Article 2, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Article 13, Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth. SECURITY OF TENURE Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a

MA. ANGELA AGUINALDO

just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (As amended by Section 34, Republic Act No. 6715, March 21, 1989) Article 277. Miscellaneous Provisions. (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989). NATURE OF THE RIGHT TO SECURITY OF TENURE • It is a jurisprudential doctrine that the right is both constitutional and statutory. Basis? Article 13, Section 2 of the Constitution and Article 279 of the Labor Code

ATENEO LAW 2010

2


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

IN WHAT WAYS CAN THE RIGHT TO SECURITY TO TENURE BE VIEWED? It can be viewed in three ways— 1. Legal: constitutional and statutory 2. Economic: economic reality or economics of relationship 3. Social: one’s standing in the community depends on his work QUIJANO V. BARTOLABAC • Employment is a property right TOLENTINO V. NLRC • Security of tenure is a right of paramount value and shouldn't be denied on mere speculation PHILIPS SEMICONDUCTORS V. FADRIQUELA • For a fixed-period employment not to violate the right to security of tenure, the following must be satisfied: o Voluntary agreement between the parties o Each one dealt with one another more or less in equal terms with no moral dominance WHY IS SECURITY OF TENURE AFFORDED THE LABORER? WHY DOES THE STATE AFFORD PROTECTION TO LABOR? • The State recognizes that one’s employment is one’s lifeblood and livelihood • Dependency and economic relations • Euro-Linea v. NLRC: preservation of lives is a basic duty and it is more vital than preservation of company profits DOESN'T THE STATE TRAMPLE ON MANAGEMENT RIGHTS WITH THE PROTECTION IT AFFORDS LABOR? • No • The state recognizes management rights, alongside with the fact that it reserves the right to inquire why and how the management exercised its right MANAGEMENT RIGHTS V. SECURITY OF TENURE

MA. ANGELA AGUINALDO

•

Again, the State recognizes management rights, as long as it is exercised in good faith and doesn't circumvent employee’s rights

SONZA V. ABS-CBN BROADCASTING • For there to be entitlement to security of tenure, one must establish the existence of an employer-employee relationship • This was the case wherein it was held that Sonza was not an employee of the company but instead is an independent contractor. The payment of money doesn't automatically mean there is an EER. The giving of benefits may arise from contractual rights but not of employment. TEST OF EMPLOYER-EMPLOYEE RELATIONSHIP 1. Hiring 2. Dismissing 3. Payment of wages 4. Control a. This test is said to be the ultimate test b. This test is satisfied if there has been a reserved right of control IS THE “REGULAR EMPLOYMENT” UNDER ARTICLE 279 THE SAME WITH THE “REGULAR EMPLOYMENT” CONTEMPLATED IN ARTICLE 280? • No, it pertains to being employed • All employees are afforded security of tenure regardless of status COVERAGE OF RIGHT Art. 278. Coverage. The provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities

ATENEO LAW 2010

3


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. CLASSIFICATION OF EMPLOYMENT STATUS • This article is not a yardstick for determining the existence of the an employment relationship because it mainly distinguishes regular and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure (Phil. Global case, June 2005) • Any agreement may provide that one party shall render services for and in behalf of another for a consideration without being hired as an employee. This is true in the case of independent contractorship as well as in agency agreements. REGULAR EMPLOYMENT, TEST OF DETERMINATION An employment is deemed regular where the employee either: 1. Has been engaged to perform which are usually necessary or desirable in the usual business or trade of an employer a. Opulencia Ice Plant and Storage v. NLRC, 46 SCAD 821: Determination of regular or casual employment is not affected by the fact of the employee’s regular presence in the place of work is not required, the more significant consideration being that the work of the employee is usually necessary or desirable in the business of the employer. b. Tan v. Lagrama, 387 SCRA 393: the primary standard or test for determining regular employment is the reasonable connection between the particular activity

MA. ANGELA AGUINALDO

2.

performed by the employee in relation to the usual trade or business of the employer. c. RJL Martinez v. NLRC, 127 SCRA 445: it can be inferred from the length of time that an employee has been made to do the job if the activities performed by him is usually necessary or desirable in the usual business or trade of the employer. 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. a. The employment is also considered regular but only with respect to such activity and while such activity exists. b. Caparoso v. CA, 15 February 2007: even if an employee is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, it does not preclude the fixing of employment for a definite period. c. Regular employment automatically attaches to the employee upon the cessation of his employment as casual employment

TEMPORARY EMPLOYMENT • Where an employee is engaged to work on a specific project or undertaking, the completion of which has been determined at the time of the engagement of the employee • The decisive determinant should not be the activities that the employees is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of their employment relationship • Day certain: that which must necessarily come, although it may not known when • While the SC upheld the validity of this form of employment, it did so with a caveat that where the circumstances were apparent that the period has been imposed to frustrate the acquisition of regular status, the same should be struck down as contrary to law, morals, customs, public order, and public policy.

ATENEO LAW 2010

4


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

FIXED-PERIOD EMPLOYMENT SHOULD COMPLY WITH THE FOLLOWING CRITERIA (Pure Foods Corp. v. NLRC, 1997) 1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent a. If the contract is one of adhesion, then there is no voluntary agreement on the fixed period employment 2. It satisfactorily appears that the employer and the employee dealt with each other on a more or less equal terms with no moral dominance whatever being exercised by the former upon the latter a. Employees always agree on any terms of employment just to get themselves employed

•

The work is purely casual when it is not part of the business in which the employer is engaged

PURPOSE OF THE LAW MAKING CASUAL EMPLOYEES WHO HAVE RENDERED AT LEAST ONE-YEAR SERVICE AS REGULAR EMPLOYEES • The purpose is to put an end to casual employment in regular jobs which have been abused by many employers to prevent so-called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions • This is to give meaning to the constitutional meaning of security of tenure and right to self-organization

*Note: There are certain forms of employment which also require the performance of usual and desirable functions and which exceed one year but don't necessarily attain regular employment status under Article 280. Seafarers are an example. They cannot be considered as regular employees. (Millares v. NLRC, 385 SCRA 306)

PROJECT EMPLOYMENT • Where the employees are employed in connection with a particular construction project or phase thereof with predetermined date of completion • The term of employment is co-terminus with the completion of the project • Commencement and termination of employment is determined or determinable (Integrated Contractors case 9 August 2005)

SEASONAL EMPLOYMENT • Where an employee is engaged to work during a particular season on an activity that is usually necessary or desirable in the usual business or trade of the employer • Employment usually ends at the end of the season • Termination doesn't constitute illegal dismissal • Proviso which considered as regular employees who have rendered 1 year of service is not applicable to seasonal employees • During off-season, the relationship of employer and employee is not severed. The seasonal employee is merely considered as on a leave of absence without pay.

REPEATED RE-HIRING • Philsystems case: repeated rehiring as a project employee doesn't automatically one as a regular employee • Caramol case: repeated rehiring as a project employee for more than 44 times automatically deems one as a regular employee • ____________: repeated rehiring deems one as a regular employee • Rabago v. ESSO: seafarers are contractual employees and never regular • Palomares v. NLRC: employees working on different projects doesn't automatically make one a regular employment

CASUAL EMPLOYMENT • Where an employee is engaged to work on an activity that is not usually necessary or desirable in the usual business or trade of the employer

ENTITLEMENT TO DUE PROCESS • Eastern Employment v. BEA: contractor or employer under legal obligation to furnish project employee of notice of termination • Policy Instruction 19: there is legal obligation to furnish local labor office of notice of termination of project

MA. ANGELA AGUINALDO

ATENEO LAW 2010

5


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

TERMINATION OF PROJECT EMPLOYEE; PROJECT EMPLOYEES AS REGULAR EMPLOYEES • If a construction project or any phase thereof has a duration of more than a year and the project employee is allowed to be employed therein for at least a year, such employee may not be terminated until the completion of the project or of any phase thereof in which he is employed without a previous written clearance from the Secretary of Labor. If such an employee is terminated without clearance, he shall be entitled to reinstatement with backwages. (See also Philsystems v. CA [2005]) • Where the employment of project employee is extended long after the supposed project had been finished, he shall be considered as regular employee (LT Datu Co v. NLRC, 68 SCAD 220) • The employer should have submitted or filed as many reports of termination as there were construction projects actually finished. The failure to do so supports the claim of the respondent that he indeed was a regular employee. (Aurora Land Projects v. NLRC, 266 SCRA 48) PROJECT EMPLOYEES IN THE WORK POOL • Two types of work pool employees— o Original concept—with or without a project, the work pool employees continue to be employees of the employer o New concept—there is a list of workers who are free to work outside if there is no project and necessarily, they cannot be considered as employees if they are then rendering services for another • If the employees in the work pool are free to leave anytime and offer their services to other employers, then they are project employees employed by a construction company in a particular project or in a phase thereof • Not necessarily regular if they are on a work pool (Abesco v. CA) NON-PROJECT EMPLOYMENT

MA. ANGELA AGUINALDO

•

An employment is deemed non-project, where the employees are employed by a construction company without reference to any particular project or a phase thereof

NON-PROJECT EMPLOYMENT IN THE WORK POOL • Members of a work pool from which the construction company draws its project employees, if considered employees of the construction company while in the work pool, are non-project employees for an indefinite period • If they are employed in a particular project, the completion of the project or of any phase thereof will not mean severance of the EER MEMBERS OF THE WORK POOL NOT ENTITLED TO UNINTERRUPTED WORK • Members of the work pool merely maintain their employment status notwithstanding completion of the project or phase of work where they are assigned but they are not entitled to an uninterrupted work TYPES 1. 2. 3.

OF NON-PROJECT EMPLOYEES Probationary Regular Casual

ROOS CONSTRUCTION V. NLRC, FEBRUARY 4, 2008 • Absent a project employment contract and termination contract, a worker is considered a regular employee • Cites Maraginot v. NLRC— o Continuous rehiring after cessation of project o Work in project is desirable or necessary to the usual business of the employer Art. 281. Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable

ATENEO LAW 2010

6


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. PROBATIONARY EMPLOYEE • One, who for a given period of time, is under observation and evaluation to determine whether or not he is qualified for permanent employment • During the probationary period, the employer is given the opportunity to observe the skill, competence, and attitude of the employee while the latter seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment • Computation is on a calendar day basis and it reckons from date of employment regardless of any intervening date • It must be made known to the employee before commencement of probationary employment • Probationary employee only enjoys a temporary employment CHARACTERISTICS OF PROBATIONARY EMPLOYMENT (Dela Cruz v. NLRC, GR 145417, 11 December 2003) 1. It is an employment for a trial period 2. It is a temporary employment status prior to regular employment 3. It arises through a contract with the following elements a. The employee must learn and work at a particular type of work b. Such work calls for certain qualifications, skills, experience, or training c. The probation is fixed d. The employer reserves the power to terminate the employment during or at the end of the trial period e. If the employee has learned the job and performed it to the satisfaction of the employer, he becomes a regular employee DURATION OF PROBATIONARY EMPLOYMENT Buiser v. Leogardo, 131 SCRA 151

• •

As a general rule, the probationary period of employment is limited to 6 months Exceptions to the general rule: o When the parties agree otherwise o When it is established by the company policy o When the same is required by the nature of the work performed by the employee

Policy Instruction No. 11, Section 6a, Rule 1, Book VI, Rules Implementing the Labor Code • If the job is apprenticeable, the probationary employment is the apprenticeship period which is not more than 6 months nor less than 3 months, depending on the nature of the job • If the job is non-apprenticeable/learnable, then the probationary employment is the learnership period which is not more than 3 months • Upon expiration of the training period, the apprentice or learner becomes a regular employee and doesn't undergo anymore a probationary period in the company that conducted the training program. However in another company, he can be placed under probationary employment period. EXTENSION BY AGREEMENT • The employer and employee may extend by agreement the probationary employment beyond 6 months • If thus extended, the employee cannot later on claim regular status on the ground that the 6-month period had already elapsed • Remember, the general rule is that an employee who is allowed to work after the probationary period shall be considered a regular employee. The exception is the agreement by the parties to extend probationary employment. (Mariwasa Manufacturing v. Leogardo, GR 74246, 26 January 1989) • SMC v. Del Rosario (2004): if its company policy and is required by the nature of the work. This must however be exercised before the expiration of the period. ENTITLEMENT TO SECURITY OF TENURE

MA. ANGELA AGUINALDO

ATENEO LAW 2010

7


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

• •

•

Dusit Hotel case, 2005: Absent any valid extension, the employee is deemed to have qualified as a regular employee How about private school teachers? (Lacuesta case) o Teacher has a full load o Teachers in tertiary load must have taught for 6 consecutive semesters o Teacher’s performance must be satisfactory A regular employee cannot be subjected to a probationary employment again even by a sister company

DOUBLE OR SUCCESSIVE PROBATION NOT ALLOWED • The system of double or successive probation is not allowed • The evil sought to be prevented is to discourage scheming employers from using the system to circumvent the mandate of the law on regularization and make it easier for them to dismiss their employees TERMINATION OF PROBATIONARY EMPLOYMENT • Probationary employees are protected by the security of tenure provision of the Constitution • However, the services of the employee engaged in probationary basis may be terminated on two grounds— o For a just cause o When he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement LABAJO V. ALEJANDRO • Contract employees enjoy security of tenure to a limited extent SKILLWORLD MANAGEMENT AND MARKETING CORPORATION V. NLRC • A probationary employee cannot be dismissed without a just cause INTERORIENT MARITIME ENTERPRISES V. NLRC • Management employees cannot be dismissed arbitrarily and without cause as determined through appropriate investigation

MA. ANGELA AGUINALDO

GUIDELINES FOR THE IMPOSITION OF PENALTIES 1. Dismissal is the ultimate penalty imposable upon an employee 2. Dismissal should be based on clear and unambiguous grounds 3. Where a penalty less punitive would suffice, whatever missteps may have been committed ought not to be visisted with a consequence so severe 4. With respect to loss of confidence and breach of trust, the basic premise is that the position held is one of trust and confidence 5. There is a wider latitude in dismissing managerial employees as they perform functions which require full trust and confidence 6. With respect to rank-and-file employees and the ground for dismissal is loss of confidence and breach of trust, there should be showing of proof of involvement by said employee TERMINATION OF EMPLOYMENT BY EMPLOYEE Art. 285. Termination by employee. a. An employee may terminate without just cause the employeeemployer relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom no such notice was served may hold the employee liable for damages. b.

An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes: 1.

Serious insult by the employer or his representative on the honor and person of the employee;

2.

Inhuman and unbearable treatment employee by the employer or his

3.

Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and

accorded the representative;

ATENEO LAW 2010

8


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

4.

Other causes analogous to any of the foregoing.

WHAT ARE THE JUST CAUSES FOR AN EMPLOYEE TO TERMINATE EMPLOYMENT? 1. Serious insult by the employer or his representative on the honor and person of the employee 2. Inhuman and unbearable treatment 3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family 4. Other analogous cases WHAT ARE THE REQUISITES FOR TERMINATION WITHOUT JUST CAUSE? • One month notice to the employer VOLUNTARY RESIGNATION • When an employee finds himself in a situation where personal reasons may not be sacrificed in favor of the exigency of the service and he has no other choice but to sever employment • There should be intent and the accompanying overt act of resignation • To be considered valid, acts before and after the resignation of the employee is considered • The employer has the burden of proof to show that there was voluntary resignation on the part of the employee WHAT ARE THE REQUISITES FOR RESIGNATION? 1. The resignation should be unconditional 2. It should be intentional Note: when one was compelled to make a choice to resign or be dismissed, such resignation was invalid due to unjustifiable pressure (Metro Transit Organization v. NLRC) VALIDITY OF AUTOMATIC RESIGNATION • Manila Broadcasting Corporation v. NLRC: it was a sound company policy to deem broadcasters as automatically resign upon filing of a certificate of candidacy

MA. ANGELA AGUINALDO

•

Ibid: the broadcaster cannot serve two masters efficiently at the same time while he is campaigning or otherwise serving public office

PERFORMANCE OF MILITARY OR CIVIC DUTY; CESSATION OF BUSINESS FOR 6 MONTHS 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. NOTES: • Not exceeding 6 months: bona fide cessation of operations • Fulfillment of military or civic duty • Employee within 1 month from resumption of operations expresses his desire to resume work TERMINATION OF EMPLOYMENT BY EMPLOYER

•

•

• •

BASIS OF RIGHT OF EMPLOYER PLDT v. Balbastro: the benefits afforded to labor don't include compelling an employer to retain the services of an employee who has shown himself to be a gross liability to the employer Manila Trading and Supply v. Zulueta: employer may not be compelled to retain employee who committed malfeasance or misfeasance towards the employer Agabon v. NLRC: the social justice clause in the Constitution is not applicable when the employee was the one who violated PLDT v. Tolentino: strained relations test is to be applied strictly in termination cases

ATENEO LAW 2010

9


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

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

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

b.

Gross and habitual neglect by the employee of his duties;

c. him d.

e.

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

Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and Other causes analogous to the foregoing.

Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who has been found to be suffering from

MA. ANGELA AGUINALDO

any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year. FUJITSU COMPUTER PRODUCTS V. CA • Dismissal should be exercised without abuse of discretion ARIOLA V. PHILEX MINING • Applied the ruling in Agabon • Belated due process rule: the lack of notice doesn't erase the crime committed SUICO V. NLRC • The law allows itself to be supplemented by company policies as long as the same are in accordance with the guidelines provided for in the implementing rules and regulations JUST CAUSES: SUBSTANTIVE DUE PROCESS WHAT DOES THE ACTS ENUMERATED IN ARTICLE 282 DESCRIBE? • The attitude of the employee towards his work • The enumerated causes have a qualifying phrase • There is a connective word (and, or) • Then it is followed by the requirements for each cause to exist as provided by jurisprudence SERIOUS MISCONDUCT • Misconduct is wrong or improper conduct • Transgression of some established or definite rule of action, a forbidden act, a dereliction of duty, willful in character and implies wrongful intent • It is not enough that the employee commits misconduct but it must be serious • Focus on a common denominator with other just cause—the infraction must be in relation with the performance of the employee’s duties

ATENEO LAW 2010

10


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

•

Echevarria, 2007: misconduct in relation to the employee’s duties

UNDER ARTICLE 282 OF THE LABOR CODE, THE MISCONDUCT, TO BE A JUST CAUSE FOR TERMINATION, MUST BE OF SUCH GRAVE AND AGGRAVATED CHARACTER, NOT MERELY OF A TRIVIAL OR UNIMPORTANT NATURE • For serious misconduct to warrant the dismissal of an employee, it (1) must be serious; (2) must relate to the performance of the employee’s duty; and (3) must show that the employee has become unfit to continue working for the employer DOES A TEACHER FALLING IN LOVE AND MARRYING HER YOUNGER STUDENT CONSTITUTE SERIOUS MISCONDUCT AND WOULD MERIT DISMISSAL? (CHUA QUA V. CLAVE; SECTARIAN SCHOOL) • No, it is not serious misconduct and constitutes illegal dismissal • There was insufficient evidence to show that the teacher used her position as a teacher to take advantage of the student PLDT V. BOLSO • Serious misconduct is improper or wrong conduct—it is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty SUPREME STEEL CORPORATION V. SY • Serious misconduct is improper or wrong conduct—it is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty • Although fighting within company premises may constitute serious misconduct, not every fight within the same in which an employee is involved would automatically warrant dismissal from the service • It is cruel and unjust to impose the drastic penalty of dismissal if not commensurate to the gravity of the offense SULAPAS V. BASCO

MA. ANGELA AGUINALDO

•

Grave misconduct manifests a clear intent to violate the law or fragrant disregard of an established rule

RODRIGUEZ V. EUGENIO • A process server who asked for bribe from a party litigant is guilty of gross misconduct PUNZAL V. ETSI TECHNOLOGIES • Even though there was serious misconduct, it wasn't related to the employee’s work as it was made during an informal Chritsmas gathering of the employees, and it is expected that employees freely express their grievances and gripes against their employers • Lack on the part of the company of any urgency in taking action negates its claim of serious misconduct on the part of the employee CANSINO V. PRUDENTIAL SHIPPING • Serious misconduct in the form of drunkenness and violent behavior, habitual neglect of duty, and insubordination or willful disobedience to the lawful orders of his superior officer, are just causes for dismissal TORRALBA V. TOSHIBA • The commission of libel against a superior officer constitutes serious misconduct VALIAO V. COURT OF APPEALS • Gross negligence connotes want of care in the performance of one’s duties while habitual neglect implies the repeated failure to perform one’s duties for a period of time, depending upon the circumstances • Habitual absenteeism without leave constitutes gross negligence and is sufficient to justify termination of an employee • The totality of infranctions or the number of violations committed during the employment period shall be considered in determining the penalty to be imposed upon the erring employee

ATENEO LAW 2010

11


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

•

Fitness for continued employment cannot be compartmentalized into tight little cubicles of conduct, character, and ability separate and independent of each other

VILLAMOR GOLF CLUB V. PEHID • While an employee may be validly dismissed for a violation of a reasoned rule of an employer for the conduct of his business, an act allegedly in breach thereof must clearly and convincingly fall within the express intendment of such rule WILLFUL DISOBEDIENCE 1. Instructions must be reasonable and lawful 2. Sufficiently known to the employee 3. In connection with his duties which the employee has engaged to discharge • PAL v. NLRC: the company rules cannot constitute a lawful order as it didn't follow proper composition IS THERE A GROUND TO DISMISS AN EMPLOYEE IF HE VIOLATES A COMPANY POLICY PROHIBITING A MANAGERIAL EMPLOYEE FROM HAVING AN AMOROUS RELATIONSHIP WITH A RANK-AND-FILE OR FELLOW MANAGERIAL EMPLOYEE? • Point of reference: willful disobedience • It could be argued that the employee cannot be dismissed validly given the absent of any just or authorized cause. The violation of the company policy cannot be anchored on willful disobedience. It can be argued that the instruction is unreasonable because having an amorous relationship with a co-worker has no connection with the efficacious discharge of his duties. DUNCAN V. GLAXO-WELLCOME (17 SEPTEMBER 2004) • Tecson was hired as medical representative of Glaxo and under the terms of his employment contract, he is obliged to disclose to the company any relationship by consanguinity or affinity to any co-employee or employee of a competitior company. And upon showing that such relationship is detrimental to the business of the company, the employee should resign.

MA. ANGELA AGUINALDO

•

•

•

•

•

•

Tecson in this case had a relationship with a branch manager in charge of distribution of products in provinces of a competitor company. Despite warnings from his superiors about his relationship giving rise to a conflict of interest, he continued his marriage with Bettsy. He then was informed that either his wife or him should resign from their jobs though the company would like as much as possible to retain Tecson. No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxo�s policy prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors, especially so that it and Astra are rival companies in the highly competitive pharmaceutical industry. The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo�s employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth.20 Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. As noted earlier, the challenged policy has been implemented by Glaxo impartially and disinterestedly for a long period of time. In the case at bar, the record shows that Glaxo gave Tecson several chances to eliminate the conflict of interest brought about by his relationship with Bettsy. When their relationship was still in its initial stage, Tecson’s supervisors

ATENEO LAW 2010

12


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

at Glaxo constantly reminded him about its effects on his employment with the company and on the company’s interests. After Tecson married Bettsy, Glaxo gave him time to resolve the conflict by either resigning from the company or asking his wife to resign from Astra. Glaxo even expressed its desire to retain Tecson in its employ because of his satisfactory performance and suggested that he ask Bettsy to resign from her company instead. Glaxo likewise acceded to his repeated requests for more time to resolve the conflict of interest. When the problem could not be resolved after several years of waiting, Glaxo was constrained to reassign Tecson to a sales area different from that handled by his wife for Astra. Notably, the Court did not terminate Tecson from employment but only reassigned him to another area where his home province, Agusan del Sur, was included. In effecting Tecson’s transfer, Glaxo even considered the welfare of Tecson’s family. Clearly, the foregoing dispels any suspicion of unfairness and bad faith on the part of Glaxo. A FRIENDLY ATTY. DISINI REMINDER: It is important not to only read the cases and know the doctrines, but more importantly, to understand how the doctrines were crafted. You should understand the principles behind the doctrines and how it will be applied. In answering a question, first ask the black-letter law on which you are anchoring your answer. Second, identify the case doctrine applicable to the situation. Third, learn how the doctrine was drafted. Lastly, learn how to identify the doctrine to the given situation. “You can read the cases till kingdom come but you won’t be able to answer the question till you know how the doctrine was crafted and how it is applicable.” BASCON V. COURT OF APPEALS The elements of gross insubordination are the following: 1. Reasonableness and lawfulness of the order or directive 2. Sufficiency of knowledge of the employee

MA. ANGELA AGUINALDO

3.

Connection of the order with the duties which the employee had been engaged to discharge

GROSS AND HABITUAL NEGLECT OF DUTY • Gross neglect means an absence of that diligence that an ordinarily prudent man would use in his own affairs • A single and isolated act of negligence doesn't constitute a just cause for termination • Gross negligence connotes want of care in the performance of one’s duties • Habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances • Fraud and will neglect connote bad faith on the part of the employee in failing to perform his job to the detriment of the employer and the latter’s business CAN PAST INFRACTIONS OF AN EMPLOYEE BE TAKEN ALTOGETHER AS BASIS TO DISMISS HIM? • Yes, using “gross and habitual neglect of duty” as basis R TRANSPORT V. EJANDRA To constitute abandonment, two elements must concur— 1. The failure to show or report for work without valid or justifiable reason 2. A clear intention to sever the employer-employee relationship GROSS AND HABITUAL NEGLECT IS CONNECTED WITH ABANDONMENT 1. Failure to report for work without valid and justifiable reason 2. Clear intention to sever EER and this must be shown thru over acts 3. The employer must have reported such fact with the nearest DOLE office (Department Order 9, series 1997)—without this, there is no case of abandonment 4. Micro Sales Network v. NLRC, 11 October 2005: a. Hermosa was unjustly dismissed. b. For willful disobedience to be a valid cause for dismissal, the following twin elements must concur: (1) the employee's assailed conduct must have been

ATENEO LAW 2010

13


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

5.

willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. c. Both elements are lacking. We find no hint of perverse attitude in Hermosa’s written explanation. On the contrary, it appears that the alleged company procedure for leaving the ignition key of the company’s vehicles within office premises was not even made known to him. Big AA Manufacturing v. Antonio, 3 March 2006 a. For accusing respondents of abandonment, petitioner must present evidence (1) not only of respondents’ failure to report for work or absence without valid reason, but (2) also of respondents’ clear intention to sever employer-employee relations as manifested by some overt acts. The second element is the more determinative factor. b. Here, petitioner’s argument in support of its abandonment charge was that respondents may have resented its issuance of the Implementing Guidelines. This, in our view, fails to establish respondents’ intention to abandon their jobs. On the contrary, by filing the complaint for illegal dismissal within two days of their dismissal on January 11, 2000 and by seeking reinstatement in their position paper, respondents manifested their intention against severing their employment relationship with petitioner and abandoning their jobs. It is settled that an employee who forthwith protests his layoff cannot be said to have abandoned his work.

**There are times when abandonment is tantamount to serious misconduct. There is also times when serious misconduct is tantamount to willful disobedience. *ABANDONMENT

MA. ANGELA AGUINALDO

• •

Deliberate and unjustified refusal of an employee to resume his employment It is a form of neglect of duty

REQUIREMENTS FOR ABANDONMENT TO EXIST (AGABON V. NLRC, 17 NOVEMBER 2004) 1. The failure to report for work or absence without valid or justified reason 2. Clear intention to sever the EER, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employee has no intention to work FRAUD OR WILLFUL BREACH OF TRUST • Fraud is defined as any act, omission, or concealment which involves a breach of legal duty, trust or confidence justly reposed, and is injurious to another • To be constituted as a just cause for dismissal, the fraud must be committed against the employer or representative and in connection with the employee’s work • As such, fraud committed by an employee against third persons doesn't in anyway involve his employer and thus, is not a just cause for dismissal • Loss of confidence applies only to cases of employees who occupy positions of trust and confidence, or to those situations where the employee is rountinely charged with the care and custody of the employer’s money or property • The willful breach must be connected with fraud POSITION OF TRUST AND CONFIDENCE • One where a person is entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property and/or funds • Basic premise is that the employee concerned holds a position of trust and confidence, and it is his breach of this trust that results in the employer’s loss of confidence • The act must be work-related to show that the employee is unfit to continue working for the employer

ATENEO LAW 2010

14


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

EXAMPLES OF POSITIONS CONSIDERED TO BE OF TRUST AND CONFIDENCE 1. Bookkeeper 2. Purchaser 3. Accountant 4. Cashier 5. Salesman 6. Bank teller 7. Ship captain 8. Managerial employee GUIDELINES FOR THE DOCTRINE OF LOSS OF CONFIDENCE (TOLENTINO V. PLDT, 8 JUNE 2005) • However, loss of trust and confidence or grave misconduct must not be based on unsubstantiated suspicions, conjectures or surmises. • Loss of trust and confidence as a just cause for termination of employee must rest on a breach of duty committed by the employee and not on the caprices of the employer. 1. 2.

Loss of confidence shouldn't be simulated It shouldn't be used as a subterfuge for causes which are improper, illegal, or unjustified 3. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary 4. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith 5. It must be substantial and not arbitrary, whimsical, capricious, and concocted *Please note that Tolentino v. PLDT only cited the same guidelines mentioned in the case of China City Restaurant v. NLRC. BUENASEDA DOCTRINE: A PHYSICIAN WHO FAILS TO QUALIFY TO A HIGHER LEVEL OF MEDICAL EDUCATION CAN BE DISMISSED. VALID COMPANY POLICY FOR DISMISSAL? • Can be argued to be a valid company policy • Preservation of lives is of paramount consideration in the medical profession and a doctor has to reach certain qualifications to efficiently carry out this duty

MA. ANGELA AGUINALDO

COMMISSION OF A CRIME • Commission of a crime involving moral turpitude is not one of the just causes under the law • This refers to an offense against the person of the employer or any immediate member of his family or his duly authorized representative ATTY DISINI REMINDER: Read Article 282 carefully. First, it is the most litigated area in labor standards law. Second, it is a bountiful ground for bar exam questions. Reading it, it limits the just causes for dismissal. However, there is the “analogous cases”. Again, remember his reminder about knowing the law, understanding the doctrines, and knowing how to apply it. IN WHAT FORM DOES ANALOGOUS CAUSES BECOME SIGNIFICANT IN THE ENUMERATED CASES IN ARTICLE 282? WHAT IS YOUR FRAME OF REFERENCE? • Remember that Article 282 tackles the attitude of the employee towards his employer, fellow employees, and work • It is significant because one is analogous only to another if it is susceptible of with the earlier enumerated cases, either generally or specifically, or has close relationship with the others • It has to be voluntary or through the willful intent of the employee • The relationship to the other cases depends on the circumstances of each case CONSTRUCTION OF “ANALOGOUS CASES” • Should be strictly construed against the employer ANALOGOUS CASES • One is analagous to another if it is susceptible of comparison with latter, either in general as in some specific detail, or has close relationship with the latter • The determination of whether the cause for terminating the employment is analogous depend on the circumstances of each case

ATENEO LAW 2010

15


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

•

To be considered analogous to the just causes, a cause must be due to the voluntary and/or willful act or omission of the employee

IS FIXED PERIOD EMPLOYMENT VALID UNDER OUR LABOR LAWS? IF SO, WHEN THE TERM OF EMPLOYMENT HAS ENDED, CAN THE EMPLOYEE BE VALIDLY DISMISSED? • Yes, following the doctrine laid down by Brent School v. Zamora • However, the following criteria should be satisfied (Pure Foods v. NLRC, 1997) 1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent a. If the contract is one of adhesion, then there is no voluntary agreement on the fixed period employment 2. It satisfactorily appears that the employer and the employee dealt with each other on a more or less equal terms with no moral dominance whatever being exercised by the former upon the latter • Employees always agree on any terms of employment just to get themselves employed • Brent School: fixed-period employment is not violative; there shouldn't be any moral ascendancy or other cause that would vitiate consent and that the employment period was knowingly and voluntarily agreed upon Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a

MA. ANGELA AGUINALDO

separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. AUTHORIZED-CAUSE OF DISMISSAL; DISTINGUISHED FROM JUST CAUSE AUTHORIZED CAUSE JUST CAUSE Terminating an employee with a liability on the part of the employer to pay separation pay as mandated by law. The dismissal process is initiated by the employer’s exercise of management prerogative

This implies that the employee has committed or is guilty of, some violation against the employer, that is, the employee has committed some serious misconduct is guilty of fraud against the employer, or he has neglected his duties such as abandonment. Payment of separation pay is not mandated by law.

RECOGNITION OF RIGHT: BUSINESS-RELATED CAUSES/PROTECTION • Agabon v. NLRC: The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment of the Court to the cause of labor does not prevent it from sustaining the employer when it is in the right, as in this case. Certainly, an employer should not be compelled to pay employees for work not actually performed and in fact abandoned. o The employer should not be compelled to continue employing a person who is admittedly guilty of misfeasance or malfeasance and whose continued

ATENEO LAW 2010

16


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

•

employment is patently inimical to the employer. The law protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. Uichicho v. NLRC: The law recognizes the right of every business entity to reduce its work force if the same is made necessary by compelling economic factors which would endanger its existence or stability. Simply put, it is an act of the employer of dismissing employees because of losses in the operation of a business, lack of work, and considerable reduction on the volume of his business, a right consistently recognized and affirmed by this Court. However, it is still subject to faithful compliance with the substantive and procedural requirements laid down by law and jurisprudence. Any claim of actual or potential business losses must satisfy certain established standards before any reduction of personnel becomes legal.

MAY AN EMPLOYEE VALIDLY INVOKE THAT SINCE THE ECONOMIC LOSSES IS ATTRIBUTABLE TO THE EMPLOYER’S FAULT, THEN HE SHOULDN'T BE JUSTIFIED IN RAISING THE SAME AS CAUSE FOR DISMISSING HIS EMPLOYEES? • INTRODUCTION OF LABOR SAVING DEVICES • The switch from “men” employment to mechanical employment has economically dislocated many workers and thus, it is only proper for the management to pay the displaced workers in order to tide them over in the meantime while they are looking for other jobs REDUNDANCY • Exists where the services of an employee are in excess of what is reasonably demanded by the actual requirement of the enterprise • This may be the outcome of overhiring of workers, decreased volume of business, the dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise

MA. ANGELA AGUINALDO

• •

This doesn't necessarily or even ordinarily refer to duplication of work A bona fide implementation of a redundancy program is not destroyed by the availment of the services of an independent contractor to replace the services of terminated employees

VALIDITY OF A REDUNDANCY PROGRAM 1. Written notice served on both the employee and the Department of Labor and Employment within 1 month prior to the intended date of retrenchment 2. Payment of separation pay equivalent to at least 1 month pay or at least 1 month for every year of service 3. Good faith in abolishing the redundant positions 4. Fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished REDUNDANCY IS SUBJECT OF MANAGEMENT PREROGATIVE • Wiltshire File v. NLRC: The characterization of private respondent's services as no longer necessary or sustainable, and therefore properly terminable, was an exercise of business judgment on the part of petitioner. The wisdom or soundness of such characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown. The determination of the continuing necessity of a particular officer or position in a business corporation is management's prerogative, and the courts will not interfere with the exercise of such so long as no abuse of discretion or merely arbitrary or malicious action on the part of management is shown. • Asufrin v. San Miguel (2004): The determination that employee’s services are no longer necessary or sustainable and, therefore, properly terminable is an exercise of business judgment of the employer. However, it is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof that such is the actual situation to justify the dismissal of the affected employees for redundancy

ATENEO LAW 2010

17


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

ESCAREAL V. NLRC: WHEN REDUNDANCY; FINANCIAL LOSS; LAW REQUIRED POSITION • When redundancy o Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise; a position is redundant when it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as the overhiring of workers, a decreased volume of business or the dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. o Redundancy in an employer’s personnel force, however, does not necessarily or even ordinarily refer to duplication of work. That no other person was holding the same position which the dismissed employee held prior to the termination of his services does not show that his position had not become redundant. o That petitioner’s positions were not duplicitous is best evidenced by the PRC’s recognition of their imperative need thereof, this is underscored by the fact that Miguelito S. Navarro, the company’s Industrial Engineering Manager, was designated as Pollution Control and Safety Manager on the very same day of petitioner’s termination. • Financial loss o There would seem to be no compelling reason to save money by removing such an important position. As shown by their recent financial statements, PRC’s year-end net profits had steadily increased from 1987 to 1990. While concededly, Article 283 of the Labor Code 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, it does not mean either that a company which is doing well can effect such a dismissal whimsically or capriciously. The fact that a company

MA. ANGELA AGUINALDO

•

is suffering from business losses merely provides stronger justification for the termination. Law required position o Private respondent PRC had no valid and acceptable basis to declare the position of Pollution Control and Safety Manager redundant as the same may not be considered as superfluous; by the express mandate of the provisions earlier cited, said positions are required by law. Thus, it cannot be gainsaid that the services of the petitioner are in excess of what is reasonably required by the enterprise. o If based on the ground of redundancy, such a move would be invalid as the creation of said position is mandated by the law; the same cannot therefore be declared redundant.

WHAT IF THE POSITION MANDATED BY LAW, INSTEAD OF BEING ABOLISHED, IS MERGED WITH ANOTHER POSITION? IS THIS STILL VIOLATIVE OF THE LAW? • No CRITERIA FOR SELECTION OF EMPLOYEE • The characterization of an employee’s services as no longer necessary or sustainable, and therefore properly terminable, is an exercise of business judgment on the part of the employer • The wisdom or soundness of such characterization or decision is not subject to discretionary review on the part of the Labor Arbiter nor the NLRC provided, of course, that violation of law or arbitrary or malicious action is not shown • It is not enough for a company to declare that it has become overmanned. It must produce adequate proof that such is the actual situation in order to justify the dismissal of the affected employees for redundancy RETRENCHMENT (TO PREVENT LOSSES) • 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

ATENEO LAW 2010

18


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

•

Purpose is to save a financially ailing establishment from eventually collapsing

LAY-OFF USED INTERCHANGEABLY WITH RETRENCHMENT • Termination of employment resorted to by the employer through no fault of nor with prejudice to the employees, during periods of business recession, industrial depression, etc. • It is an act of the employer of dismissing employees because of losses ion business operations, lack of work, and considerable reduction of the volume of the business, a right consistently recognized and affirmed by the court. LEGAL PROCEDURE FOR RETRENCHMENT 1. That a one-month prior notice be given to the employee and the DOLE as prescribed by law 2. That a fair and reasonable criteria be used in carrying out the retrenchment program GENERAL STANDARDS FOR RETRENCHMENT (LOPEZ SUGAR CORPORATION CASE) 1. Losses expected are substantial not merely de minimis (Note: the law is concerned with the amount of losses to be incurred) 2. The apprehended substantial losses are reasonably imminent and can be perceived objectively and in good faith by the employer 3. Due to far-reaching nature of retrenchment, it is reasonably necessary to prevent the expected losses (measure of last resort) 4. Expect or actual losses must be proved by substantial evidence. WHAT PROOF SHOULD BE PRESENTED TO SUBSTANTIATE LOSSES INCURRED BY EMPLOYER? • It can be in the form of financial statements which can contemplate either historical or anticipatory losses • How can these pieces of proof be authenticated? How can the integrity of this proof be preserved? • It may be audited by an independent auditor and not an internal auditor

MA. ANGELA AGUINALDO

• •

“The cock has not crowed yet but the hands are already being washed” Why the diff? the document is better to be prepared by a neutral third party

RETRENCHMENT IS THE LAST RESORT, MEANING (as held in the case of LOPEZ SUGAR CORPORATION) • The law is saying that the workforce can only be touched after you have touched the other factors of production • The employer should have first exercised ways to downplay losses by adjusting factors of production before the human factor/workplace IF AND WHEN THE EMPLOYER DECIDES TO RETRENCH, THERE SHOULD BE A CRITERIA TO BE FOLLOWED • Yes, see Lopez Sugar Corporation case REDUNDANCY V. RETRENCHMENT REDUNDANCY "Redundancy" exists when the services of an employee are in excess of what is required by an enterprise.

CLOSURE 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

RETRENCHMENT "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. RETRENCHMENT 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

ATENEO LAW 2010

19


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

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. Reduction of personnel

•

TEMPORARY RETRENCHMENT (SEBUGERO V. NLRC) • Petitioners were temporarily laid off from their work due to the cessation of work orders to the company. However during the period they were under temporary retrenchment, the company relayed to them that the company couldn't rehire them any longer due to the complete stoppage of orders. They saw them as a ploy to illegally dismiss them and they consequently filed for illegal dismissal against the company. The Labor Arbiter and NLRC bought concurred in finding a valid cause for retrenchment however they disagreed on the effect of the lack of compliance with procedural due process. • It is now settled that where the dismissal of an employee is in fact for a just and valid cause and is so proven to be but he is not accorded his right to due process, i.e., he was not furnished the twin requirements of notice and the opportunity to be heard, the dismissal shall be upheld but the employer must be sanctioned for non-compliance with the requirements of or for failure to observe due process. The sanction, in the nature of indemnification or penalty, depends on the facts of each case and the gravity of the omission committed by the employer.

•

Complete cessation of business

REHIRING EFFECT CLOSURE OF BUSINESS • Reversal of fortune of the employer whereby there is a complete cessation of business operations and/or actual locking –up of the doors of establishment, usually due to financial losses

MA. ANGELA AGUINALDO

•

•

It is an authorized cause for termination of employment which aims to or prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped An employer may however close or cease his business operations or undertaking even if he is not suffering from serious business losses or financial reverses, as long as he pays his employees the termination pay in the amount corresponding to their length of service Closure of business must be bona fide and it is sufficient that the establishment, department, or unit where the employee is employed closes or ceases to operate. The closure must be permanent. Otherwise the employment relationship shall only be suspended.

Espina v. CA (519 SCRA 327) Work is a necessity that has economic significance deserving legal protection. However, employers are also accorded rights and privileges to assure their self-determination and independence and reasonable return of capital. This mass of privileges comprises the so-called management prerogatives. State has the right to determine whether an employer's privilege is exercised in a manner that complies with the legal requirements and does not offend the protected rights of labor. One of the rights accorded an employer is the right to close an establishment or undertaking. Just as no law forces anyone to go into business, no law can compel anybody to continue the same. The right to close the operations of an establishment or undertaking is explicitly recognized under the Labor Code as one of the authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the purpose of circumventing the provisions on terminations of employment embodied in the Labor Code and may be justified on grounds other than business losses but it cannot be an unbridled prerogative to suit the whims of the employer.

ATENEO LAW 2010

20


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

Under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of business operations, namely: (1) service of a written notice to the employees and to the DOLE at least one (1) month before the intended date thereof; (2) the cessation must be bona fide in character; and (3) payment to the employees of termination pay amounting to at least one half (1/2) month pay for every year of service, or one (1) month pay, whichever is higher. The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in character. Burden of proof is upon the employer. Respondent M.Y. San in good faith complied with the requirements for closure; sold and conveyed all its assets to respondent Monde for valuable consideration; and there were no previous labor problems. Thus, since respondent M.Y. San's closure and cessation of business was lawful, there was no illegal dismissal of petitioners to speak of. Monde exercised in good faith its management prerogative in terminating Espina, et. al. who had been habitually absent, neglectful of their work, and rendered unsatisfactory service, to the damage and prejudice of the company. EXTENT OF CLOSURE/DEGREE OF PARTIAL CLOSURE • Cheniver Deco Print Corporation v. CA: Broadly speaking, there appears no complete dissolution of petitioner's business undertaking but the relocation of petitioner's plant to Batangas, in our view, amounts to cessation of petitioner's business operations in Makati. It must be stressed that the phrase "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 complete cessation of all business operations and the cessation of only part of a company's business. In Philippine Tobacco Flue-Curing & Redrying Corp. vs. NLRC a company transferred its tobacco processing plant in Balintawak, Quezon City to Candon, Ilocos Sur. The company therein did not actually close its entire business but merely relocated its tobacco processing and redrying operations to another place.

MA. ANGELA AGUINALDO

Yet, this Court considered the transfer as closure not due to serious business losses for which the workers are entitled to separation pay. REQUIREMENTS FOR CLOSURE OF BUSINESS; 30-DAY NOTICE TO DOLE MANDATORY 1. Service of written notice to the employees and to the DOLE at least 1 month before the intended date thereof 2. Cessation of business operations is bona fide in character 3. Payment of the separation pay amounting to at least ½ month pay for every year of service or 1 month pay, whichever is higher SEPARATION PAY IN AUTHORIZED CAUSE DISMISSAL 1. One month pay for every year of service a. Automation b. Redundancy 2. On-half month pay for every year of service a. Retrenchment to prevent losses b. Closure not due to serious economic losses 3. No separation pay a. Closure due to serious economic reverses BASIS OF SEPARATION PAY • Shall be based on the latest salary rate unless the same was reduced by the employer to defeat the intention of the LC, in which case, the separation pay shall be based on the rate before the deduction CHANGE OF BUSINESS OWNERSHIP: PRINCIPLE OF ABSORPTION • In the exercise of management prerogative, the employer may merge tor coordinate its business with another, or sell or dispose all or substantially all of its assets and properties which may bring about the dismissal or termination of its employees in the process • The change of ownership doesn't create an obligation of the part of the new owner top absorb the employees of the preivous owner

ATENEO LAW 2010

LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

TEMPORARY CESSATION OF OPERATIONS (ARTICLE 286) SAN JOSE HOSPITAL OF DIGOS V. SEC. OF LABOR, 263 SCRA 98 • Temporary suspension of operations is reorganized as a valid exercise of management prerogative provided it is not carried out in order to circumvent provisions of the Labor Code or to defeat the rights of the employees under the Code. The determination to cease or suspend operations is a prerogative of management that the State usually does not interfere with, as no business can be required to continue operating at a loss simply to maintain the workers in employment. Such an act would be tantamount to a taking of property without due process of law, which the employer has a right to resist. But where it is shown that the closure is motivated not by a desire to prevent further losses, but to discourage the workers from organizing themselves into a union for more effective negotiations with management, the State is bound to intervene. SPECIAL CASE OF BUSINESS TRANSFER SUNDOWNER DEVELOPMENT CORPORATION V. DRILON, 1989 • Mabuhay was leasing the premises owned by Syjuico but failed to pay later rentals. A case for ejectment was filed but a comprise was entered into. Mabuhay agreed to vacate and subsequently sold its properties to be able to pay its debts. Syjuico on the other hand leased the building anew to petitioner. Mabuhay as well sold its properties to petitioner. When petitioner was about to occupy the premises, the union of Mabuhay picketed the premises, denying the employees of petitioner to enter. Petitioner consequently filed for preliminary injunction and damages.

21


in personam, thus binding only between the parties. A labor contract merely creates an action in personally and does not create any real right which should be respected by third parties. This conclusion draws its force from the right of an employer to select his employees and to decide when to engage them as protected under our Constitution, and the same can only be restricted by law through the exercise of the police power. As a general rule, there is no law requiring a bona fide purchaser of assets of an on-going concern to absorb in its employ the employees of the latter. However, although the purchaser of the assets or enterprise is not legally bound to absorb in its employ the employers of the seller of such assets or enterprise, the parties are liable to the employees if the transaction between the parties is colored or clothed with bad faith. In the case at bar, contrary to the claim of the public respondent that the transaction between petitioner and Mabuhay was attended with bad faith, the court finds no cogent basis for such contention. Thus, the absorption of the employees of Mabuhay may not be imposed on petitioner. PROCEDURAL DUE PROCESS: NATURE AND REQUIREMENTS

HELD: The rule is that unless expressly assumed, labor contracts such as employment contracts and collective bargaining agreements are not enforceable against a transferee of an enterprise, labor contracts being

MA. ANGELA AGUINALDO

ATENEO LAW 2010

LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

22


containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989). IN GENERAL (AGABON V. NLRC, supra) • Under the Wenphil doctrine, where the employer had a valid reason to dismiss an employee but didn't comply with the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee • Under the Serrano ruling, the violation by the employer of the notice requirement in termination for just or authorized causes wasn't a denial of due process that will nullify termination. The dismissal is ineffectual and the employer must pay backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause.

ART. 277. Miscellaneous provisions. (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice

MA. ANGELA AGUINALDO

After carefully analyzing the consequences of the divergent doctrines in the law on employment termination, we believe that in cases involving dismissals for cause but without observance of the twin requirements of notice and hearing, the better rule is to abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the employer. Such sanctions, however, must be stiffer than that imposed in Wenphil. By doing so, this Court would be able to

ATENEO LAW 2010

LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

achieve a fair result by dispensing justice not just to employees, but to employers as well. Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights, as ruled in Reta v. National Labor Relations Commission.36 The indemnity to be imposed should be stiffer to discourage the abhorrent practice of "dismiss now, pay later," which we sought to deter in the Serrano ruling. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer. The violation of the petitioners' 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.40 Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. JAKA FOOD PROCESSING V. CA, 28 MARCH 2005 • The employees were dismissed by the company due to in dire financial needs. However, no due process was accorded the employees when they were dismissed. • Agabon fine-tuning decision HELD: A dismissal for just cause under Article 282 implies that the employee concerned has committed, or is guilty of, some violation against the employer, i.e. the employee has committed some serious misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected his duties. Thus, it can be said that the employee himself initiated the dismissal process.

MA. ANGELA AGUINALDO

23


On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by the employer’s exercise of his management prerogative, i.e. when the employer opts to install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes to implement a retrenchment program. The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation pay, as a rule, is not required, while in the second, the law requires payment of separation pay. For these reasons, there ought to be a difference in treatment when the ground for dismissal is one of the just causes under Article 282, and when based on one of the authorized causes under Article 283. 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 management prerogative. ESSENCE OF DUE PROCESS • The employer shall afford the worker an ample opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of • This contemplates freedom from arbitrariness ELEMENTS OF DUE PROCESS IN CASES OF DISMISSAL • Notice and hearing • Notice is intended to inform the employee concerned of the employer’s intent to dismiss and the reason for the proposed dismissal

ATENEO LAW 2010

24


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

•

•

Hearing affords the employee the opportunity to answer his employer’s charges against him and accordingly to defend himself therefrom before dismissal is effected Neither two can be dispensed with

SUICO V. PLDT, 30 JANUARY 2007 (citing STAMFORD MARKETING CORPORATION V. JULIAN, FEBRUARY 2004) • Union officers might be automatically be terminable due to staging illegal strikes, but they are still entitled to due process. • Nothing in Article 264 authorizes automatic dismissal of the union officers. • Art. 277 (b) in relation to Art. 264 (a)55 and (e)56 recognizes the right to due process of all workers, without distinction as to the cause of their termination. Where no distinction is given, none is construed. Hence, the foregoing standards of due process apply to the termination of employment of Suico, et al. even if the cause therefor was their supposed involvement in strike-related violence prohibited under Art. 264 (a) and (e). • Moreover, the procedure for termination prescribed under Art. 277(b) and Rule XXII of the Implementing Rules of Book V is supplemented by existing company policy. Art. 277(b) provides that the procedure for termination prescribed therein is without prejudice to the adoption by the employer of company policy on the matter, provided this conforms with the guidelines set by the DOLE such as Rule XXII of the Implementing Rules of Book V. This is consistent with the established principle that employers are allowed, under the broad concept of management prerogative, to adopt company policies that regulate all aspects of personnel administration including the dismissal and recall of workers. BIFLEX PHILS. INC. LABOR UNION V. FILFLEX INDUSTRIAL AND MANUFACTURING CORPORATION, 19 DECEMBER 2006 • Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a

MA. ANGELA AGUINALDO

•

•

replacement had been hired by the employer during such lawful strike. The law grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment." Reinstatement of a striker or retention of his employment, despite his participation in an illegal strike, is a management prerogative which this Court may not supplant. The dismissals under Article 264 can be immediately resorted because Article 264 says so. When there is mention of loss of employment status, it is self-executing and there is exercise of management prerogative.

ONUS PROBANDI • The burden of proof rests upon the employer to show that the dismissal of the employee is for a just cause, and failure to do so would necessarily mean that the dismissal is not justified, consonant with the constitutional guarantee of security of tenure as implemented by law DEGREE OF PROOF • Substantial evidence sufficient • It means more than a mere scintilla 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 SANCTIONS AND REMEDIES RELIEFS AND NORMAL CONSEQUENCES IN ILLEGAL DISMISSAL • Employees who are illegally dismissed are entitled to reinstatement without loss of seniority rights and other privileges and to their full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from time compensation was withheld up to time of their actual reinstatement MEANING AND NATURE OF REINSTATEMENT

ATENEO LAW 2010

25


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

• • •

Restoration to a state from which one has been removed or separated Safeguard and gurantee provided by the security of tenure clause of the Constitution As a relief, it is a vindication against unjustified dismissal

ORDER FOR REINSTATEMENT

ACTUAL REINSTATEMENT

Decision of the Labor Arbiter to restore the employee to his previous position

The award of backwages and other benefits continue beyond the date of the Labor Arbiter’s decision ordering reinstatement and extends up to the time said order of reinstatement is actually implemented

REINSTATEMENT Restoration to a state from which one has been removed or separated Note:

BACKWAGES Form of relief that restores the income that was lost by reason of the unlawful dismissal

1. 2.

The award of one is not a condition precedent of another Twin remedies that are distinct and separate from one another

REINSTATEMENT NO LONGER PROPER WHEN THE POSITION DOESN'T ANYMORE EXIST • If the position previously occupied by the employee no longer exists at the time of reinstatement, he should be given a substantianly equivalent position • However, if such doesn't exist, reinstatement shouldn't be ordered because that would in effect compel the employer to do the impossible • In this case, separation pay is proper

MA. ANGELA AGUINALDO

REINSTATEMENT NOT PROPER, POSITION PREVIOUSLY OCCUPIED ALREADY FILLED UP • If the position previously occupied byu the dismissed employee has already been filled up, it would be unjustified for the employer to dismiss the person hired and to replace the dismissed employee just to make available the position for the latter • Proper remedy would be to reinstate him to a substantially equivalent position REINSTATEMENT NOT PROPER, POSITION NOT PREVIOUSLY OCCUPIED BY HIM • An employee who at the time of dismissal was occupying a temporary or lower position cannot be ordered reinstated to a permanent or higher position for he didn't previously occupy such position SEPARATION PAY IN LIEU OF REINSTATEMENT 1. Reinstatement can no longer be effected in view of the realites of the situation 2. That it would be inimical to the employer’s interest 3. That reinstatement is no longer feasible 4. That it will not serve the best interests of the parties involved 5. That the company would be prejudiced by the worker’s continued employment 6. That it will not serve the prudent purposes as when supervening facts have transpired which make execution unjust or inequitable 7. That there is a resultant strained relations between the employer and employee, where the employee concerned occupied a position of trust and confidence, and it is likely that if reinstated, an atmosphere of apathy and antagonism may be generated as to adversely affect the efficiency and productivity CIRCUMSTANCES THAT BAR REINSTATEMENT 1. Dismissal for cause 2. Abandonment of right or laches 3. Resignation of employee 4. Physical incapacity of employee

ATENEO LAW 2010

26


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Employee accepts retirement pay When employment relationship becomes so strained Closure or cessation of operations Transfer of business to innocent transferee Economic reverses Abolition of position Prescription Conviction of a crime Not conducive to industrial harmony Over-aged employee Fiduciary relationship Legal proscription

WITHOUT LOSS OF SENIORITY RIGHTS, CONSTRUED • Seniority—length of service of employees in a specified unit for the purposes of determining the order in which workers will be laid off, promoted, transferred, or rehired • The phrase denotes that benefits due a dismissed employees including seniority rights and other privileges will not be affected by his absence due to suspension of employment brought about by the unlawful dismissal MEANING OF BACKWAGES • Form of relief that restores the income off the employee that was lost by reason of his illegal dismissal • It is in furtherance and effectuation of the public objectives of the LC and is in the nature of a command upon the employer to make public reparation for his violation of the LC PAYMENT OF SEPARATION PAY • Amount that an employee receives at the time of severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment • It is oriented to the future, the transitional period the dismissed employee must undergo before locating a replacement job • Two instances when separation pay MAY NOT BE PAID o Dismissal not due to serious misconduct

MA. ANGELA AGUINALDO

o

Such dismissal is not reflective of the employee’s moral character—if the offense involves moral turpitude, then separation pay may not be awarded

RETIREMENT FROM EMPLOYMENT Art. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided therein. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of

ATENEO LAW 2010

27


LABOR 2 DISINI NOTES (PART 1: TERMINATION OF EMPLOYMENT)

service, a fraction of at least six (6) months being considered as one whole year.

•

Carlos Solomon v. Associated Shipping Lines, there was no double recovery because this was provided in the CBA.

Unless the parties provide for broader inclusions, the term ‘one-half (1/2) month salary’ shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code. RETIREMENT • Result of a bilateral act of the parties, a voluntary agreement between the employer and employee whereby the latter, after reaching a certain age, agrees to severe his employment with the former • Withdrawal from office, business, occupation, public duty or services upon reaching a certain age • The aforequoted provision provides for the labor standard benefit of retirement pay—a minimum, which can be increased byu agreement of the employer and employee, or by CBA, or by law IF ONE RETIRES VALIDLY UNDER ARTICLE 287, CAN HE ALSO VALIDLY CLAIM FOR RETIREMENT BENEFIT UNDER THE CBA TOGETHER WITH THE RETIREMENT PLAN PROVIDED FOR BY ARTICLE 287? • In the case of Aquino v. NLRC, you can especially if there is no bar provided for double recovery either in the retirement plan or in the CBA.

MA. ANGELA AGUINALDO

ATENEO LAW 2010