Labor Relations
Content
Labor Relations – Finals Review
4. May an employer validly close his business for
personal reason?
1. What is security of tenure?
Security of tenure is defined as the right not to be
removed from one’s job without valid cause and
valid procedure; it extends to regular (permanent)
as well as nonregular (temporary) employment.
Security of tenure may be for a limited period or
for an unlimited period.
The labor code provides that in cases of regular
employment, the employer shall not terminate the
services of an employee except for a just cause
or for an authorized cause under the code.
Further, 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
allowance, 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.
2. What is an agency fee?
Agency fee is an amount equivalent to union
dues which a nonunion member pays to the
union because he benefits from the CBA
negotiated by the union. It is an “agency fee”
because in negotiating the CBA, the union
served as the employee’s agent. There would be
unjust enrichment on the part of the nonunion
member if he derives benefit from the efforts of
the negotiating union without giving his
contribution thereto.
Yes, if the business is not losing but its owner, for
reasons of his own, wants to get out of the
business, he in good faith can lawfully do so
anytime. Just as the law forces no one to enter
into business, no law compels anybody to stay in
business. But the employees should be paid the
severance pay.
The requisites for closure of business are as
follows:
(1) That it must be done in good faith;
(2) That there must a one (1) month notice to the
DOLE and the employees; and
(3) There must be separation pay to employees
which is equivalent to one (1) month pay or
one-half (1/2) month pay for every year of
service, whichever is higher; but, according
to recent jurisprudence, if there are NO
losses at all, it must be one (1) month pay for
every year of service.
5. What if there were losses? Would the answer in
Number 4 be the same?
The answer would depend on whether the loss is
serious or not.
If the firm faces serious business losses or
financial reverses, the employer is not required
by law to pay separation pay. However, if the loss
or financial reverses are not so serious, the
employer is required to pay one month pay or
one-half month pays for every year of service,
whichever is higher, the fraction of 6 months
considered as one year.
3. What is a probationary employee?
A probationary employee is one who is under
observation by an employee to determine
whether or not he is qualified for permanent
employment.
Under the labor code, 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 standards made known by the
employer to the employee at the time of his
engagement.
An employee who is allowed to work after the
probationary period shall be considered a regular
employee.
The employer is, nonetheless, still required to
give 2 notices still: one to the DOLE and one to
the employees. Failure to comply with the
procedural requirement shall hold the employer
liable to pay indemnity for the violation of
procedural due process.
6. What are the 4 kinds of separation pay?
(a) Statutory requirement for authorized causes;
(b) Financial assistance (social justice);
(c) In lieu of reinstatement where reinstatement
is not feasible;
(d) Benefit in the CBA or company policy.
7. What are the consequences of illegal dismissal?
The following are the consequences of illegal
dismissal:
(1) Reinstatement. This has the consequence of
restoring the employee to his previous
position quo ante prior to the dismissal
without the loss of seniority rights and other
benefits;
(2) Backwages. It is the amount of money given
to the employee as compensation for
earnings lost from the time he or she was
illegally dismissed up to the time of actual
reinstatement. This includes basic pay and
benefits ordinarily enjoyed by the employee
including 13th month pay. Full backwages
should be paid;
(3) Separation pay in lieu of reinstatement. This
is required pursuant to the doctrine of
strained relations. The employees covered
under this usually includes those managerial
and supervisory employees who needs the
trust and confidence of management as a
prerequisite for continued employment;
(4) Damages. Damages can either be moral,
exemplary or nominal.
Moral damages may be awarded for the
besmirched reputation, wounded feelings,
mental anguish or sleepless nights which the
employee has suffered as a result of the
dismissal which was tainted with bad faith or
fraud.
Exemplary damages may be awarded in
case the dismissal was done in a wanton and
oppressive manner.
Nominal damages may be awarded when the
procedural due process requirements are not
complied with.
8. Discuss the prescription of actions in labor.
1 year – for unfair labor practices from the time of
accrual of such unfair labor practice;
4 years – action for reinstatement by reason of
illegal dismissal which shall from the time of
dismissal; and
3 years – action for money claims which runs
from the time the cause of action accrued.
9. What are the just causes for termination?
SGFCO
JUST CAUSES (Art. 296, as amended)
(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 member of his family or his duly
authorized representative; and
(e) Other cases analogous to the foregoing.
10. What is a fixed-period contract of employment?
Fixed period employment contracts are not
limited to those which are seasonal or for specific
projects with predetermined dates of completion;
they also include those to which the parties by
free choice have assigned a specific date of
termination.
The case of Brent Schoo, Inc. vs Zamora laid
down the requisites for a valid fixed-period
employment contract, viz:
(1) The fixed period of employment was
KNOWINGLY and VOLUNTARILY agreed
upon by the parties without any fraud,
duress, or improper pressure;
(2) It appears that the employer and employee
dealt with each other on a, more or less,
equal terms with no MORAL DOMINANCE
exercised by the former or the latter.
11. Who are regular employees?
The labor code provides that the provisions of
written contracts to the contrary notwithstanding
and regardless of the oral agreement of the
parties, an employee shall be deemed regular if
he has been engaged to perform activities which
are usually necessary or desirable in the usual
business or trade of the employer.
12. Who are fixed-term or project employees and
seasonal employees?
Even if employees are engaged to perform
activities which are usually necessary or
desirable in the in the usual trade or business of
the employer, they are not regular employees
where:
(1) the employment has been fixed for a specific
project or undertaking the completion of
which has been determined at the time of the
engagement of the employee; or
(2) where the work or services to be performed
is seasonal in nature and the employment is
for the duration of the season;
The first is classified as project
employees whereas the second are considered
seasonal employees.
13. Who are casual employees?
Where an employee does not fall under the
category of regular, project or seasonal
employees, such employee shall be deemed a
casual employee; except when such employee
has performed more than one (1) year, whether
continuous or broken. In which case, they shall
be deemed regular employees.
14. Can seasonal employees be considered regular?
Yes, a seasonal employee can become a regular
employee if his contract is successively renewed
every season for a period exceeding one year
and provided that he is engaged to perform
activities which are usually necessary or
desirable in the usual trade or business of the
employer.
The regular seasonal employees are not, strictly
speaking, separated from the service during offseason but are merely considered as on leave of
absence without pay until they are re-employed.
Their employment relationship is not severed but
is merely suspended.
15. Can a project employee become a regular
employee?
Yes, jurisprudence provides that a project
employee or a member of a workpool may
acquire the status of regular when the following
concur:
(1) There is continuous rehiring of project
employees even after cessation of a project;
and
(2) The tasks performed by the alleged “project
employee” are vital, necessary and
indispensable to the usual business or trade
of the employer.
16. Can casual
employees?
employees
become
regular
Yes, when the casual employee has provided for
services to the employer for more than one year,
whether continuous or broken.
17. What is preventive suspension? Discuss its
nature and extent.
Preventive suspension is the means by which an
employer precludes the employee from reporting
for work and performing his work thereunder for
the protection of the company’s property pending
investigation of any alleged malfeasance or
misfeasance committed by the employee.
The implementing rules of the labor code
provides that the employer may place the worker
concerned under preventive suspension if his
continued employment poses a serious and
imminent threat to the life or property of the
employer or of his co-workers.
The main purpose of preventive suspension is to
provide the management or the appropriate
investigation committee the chance to thoroughly
examine the circumstances and the extent of the
alleged malfeasance. If the employee is not
preventively suspended, he or she may tamper
with the evidence necessary for the proper
investigation of the offense.
The preventive suspension must not exceed 30
days; otherwise, it would be deemed a
constructive
dismissal.
Nonetheless,
management has the discretion to extend the
preventive suspension provided that it reinstates
the employee under preventive suspension to its
payroll and resume paying him his pay even if he
is not physically present and dispensing his job.
18. Discuss the retirement.
Retirement is the result of bilateral act of the
parties, a voluntary agreement between the
employer and the employee whereby the latter,
after reaching a certain age, agrees and/or
consents to sever his employment with the
former.
The labor code provides that unless through a
Collective Bargaining Agreement or other
employment contract providing for greater
benefits, an employee upon reaching the age of
60 or the compulsory age of retirement of 65
years old, who has served the company for at
least 5 year, may retire and shall be entitled to
one-half month pay for every year of service, a
fraction of 6 months shall be deemed one year.
Unless the parties provide for broader inclusions,
the term one-half month pay shall mean 15 days
plus one-twelfth of the 13 th month pay and cash
equivalent of no more than 5 days of service
incentive leaves.
In simpler terms, it is approximately 22.5 days for
every year of service.
This law does not apply to:
(1) Domestic household servants;
(2) Retail,
service,
and
agricultural
establishments employing no more than 10
employees;
(3) Government employees; and
(4) Underground mining employees who may
retire upon reaching age 50 but not to
exceed 60 years old, being their compulsory
age of retirement, and who having served at
least 5 years in the company
19. What are the four authorized causes? Explain
each.
The authorized causes for termination are as
follows:
(a) Introduction of labor-saving devices – this
include the substitution of manual labor in
factories by machineries and equipment; it
may also include the outsourcing of several
departments of the company which may
include its security, janitorial and
maintenance departments, and such other
management prerogative to cut labor
expenditures;
(b) Redundancy – occurs when there is
superfluity of in the labor force of a company
such as when there is an excess of what
may be required in the operations of the
business. This arises as a result of
overhiring, or a closure of certain business or
product line and such other circumstances
where certain employee functions are
deemed superfluous.
(c)
Retrenchment – occurs when there is
imminent or actual losses experienced by the
employer and it becomes necessary to
terminate some employees in order to
prevent worsening the company’s financial
condition. This is distinguished from
redundancy in the sense that in redundancy,
there is yet no imminent or actual loss by the
company, though both redundancy and
retrenchment may have the same causes.
(d) Closure of business – this may be due to
serious business losses or financial reverses
or not. If case of serious business losses or
financial reverses, a business indefinitely
suspends operations and therefore ceases to
employ the workers. If not due to serious
business losses or financial reverses, it may
be one caused by merger, consolidation, or
sale in good faith by the employer of his
business or it may also be just the decision
of the employer to cease operations in good
faith.
20. What are the obligations of the employer if it
terminates an employee for authorized cause?
First of all, the employer is duty bound to give
notice, at least 30 days before effecting the
termination, written notices to both the
appropriate Regional Office of the DOLE and the
employee. The notice required is individual
notice. Thus, notice in the bulletin board is
insufficient as this is collective notice.
The employer is also duty bound to pay
separation pay depending on the reason for the
termination, viz:
(1) For introduction of labor-saving devices
and/or redundancy the employer is required
to pay a separation pay equivalent to one
month pay or one month pay for every year
of service, whichever is higher, fraction of 6
months is considered 1 year;
(2) For retrenchment and/or closure of business
NOT due to serious business losses or
financial reverses, the employer is required
to pay separation pay equivalent to one
month or one-half month pay for every year
of service, whichever is higher, fraction of 6
months considered 1 year.
(3) For closure of business due to serious
business loses or financial reverses, no
separation pay is required.
The employer in dismissing the employee must
also be in good faith such that the termination of
employment is not merely on inexistent grounds
and should not be made to subterfuge in order to
get rid of unwanted employees or to subvert the
impending organization of labor, in which case, it
shall tantamount to unfair labor practice.
If the termination is due to losses, there must be
sufficient evidence that the loss is grave enough
to justify the termination of employment.
21. What are the four kinds of separation pay?
(a) Separation pay as employer’s statutory
obligation in cases of legal termination due to
authorized causes;
(b) Separation pay as financial assistance, as an
act of social justice, even in case of legal
dismissal, at court’s discretion;
(c) Separation pay in lieu of reinstatement in
illegal dismissal cases where the employee
is ordered reinstated but reinstatement is
infeasible; and
(d) Separation pay as an employment benefit
granted in a CBA or company policy.
22. Define resignation.
Resignation is a voluntary act of the employee
where his personal reason cannot be sacrificed
over the urgency of service, and he has no
choice but to disassociate himself from the
company.
23. How may an employee terminate employeremployee relationship without just cause?
An employee may terminate without just cause
the EE relationship by serving a written notice on
the employer at least one (1) month in advance;
the employer upon whom no such notice was
given may hold the employee liable.
24. How may an employee terminate employeremployee relationship without giving notice?
An employee may terminate the EE without
serving notice to employer for any of the
following causes:
(1) Serious insult by the employer or his
representative on the honor and person
of the employee;
(2) Inhuman and unbearable treatment
accorded the employee by the employer
or his representative;
(3) Commission of a crime or offense by the
employer or his representative against
the person of the employee or any of the
immediate member of his family; and
(4) Other cases analogous to the foregoing.
JUST CAUSE
Grounds
Procedural due
process
Consequences
(1) Serious misconduct or willful
disobedience by the employee of
the lawful orders of his employer or
representative in connection with his
work;
(2) Gross and habitual neglect by the
employee of his duties;
(3) Fraud or willful breach by the
employee of the trust reposed on
him by his employer or duly
authorized representative;
(4) 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
(5) Other analogous causes to the
foregoing.
(1) Written notice specifying the ground
for termination;
(2) Hearing or conference during which
an employee is given the
opportunity to respond to the
charge, present his evidence, or
rebut the evidence presented
against him (opportunity to be
heard);
Note: reasonable opportunity to be
heard is at least 5 days
(3) Written notice of termination.
-General rule:
No financial assistance required
-Exception:
For analogous cases (No. 5 ground), the
court may opt to grant separation pay
anchored on social justice.
AUTHORIZED CAUSE
(1)
(2)
(3)
(4)
Installation of labor-saving device;
Redundancy;
Retrenchment to prevent losses;
Closure or cessation of operation of
establishment/undertaking
(a) Due to serious business losses or
financial reverses; and
(b) Not due to serious business losses or
financial reverses
(5) Disease where his continued employment is:
(a) Prohibited by law;
(b) detrimental to his health; or
(c) detrimental to his co-workers
COMP
Work is co
Service of written notice (two-notice requirement) at
least 30 days before effectivity to:
(1) The appropriate Regional Office of the
DOLE; and
(2) The employees
No notice r
must repor
nearest Pu
statistical p
-For (1) and (2): 1 month pay or 1 month pay for
every year of service, whichever is higher, 6mos=1yr
-For (3) and (4-B): 1 month pay or ½ month pay for
every year of service, whichever is higher, 6mos=1yr
-For (4-a): none required
-For (5): 1 month pay or ½ month pay for every year
of service, whichever is higher, 6mos=1yr
None
4. May an employer validly close his business for
personal reason?
1. What is security of tenure?
Security of tenure is defined as the right not to be
removed from one’s job without valid cause and
valid procedure; it extends to regular (permanent)
as well as nonregular (temporary) employment.
Security of tenure may be for a limited period or
for an unlimited period.
The labor code provides that in cases of regular
employment, the employer shall not terminate the
services of an employee except for a just cause
or for an authorized cause under the code.
Further, 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
allowance, 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.
2. What is an agency fee?
Agency fee is an amount equivalent to union
dues which a nonunion member pays to the
union because he benefits from the CBA
negotiated by the union. It is an “agency fee”
because in negotiating the CBA, the union
served as the employee’s agent. There would be
unjust enrichment on the part of the nonunion
member if he derives benefit from the efforts of
the negotiating union without giving his
contribution thereto.
Yes, if the business is not losing but its owner, for
reasons of his own, wants to get out of the
business, he in good faith can lawfully do so
anytime. Just as the law forces no one to enter
into business, no law compels anybody to stay in
business. But the employees should be paid the
severance pay.
The requisites for closure of business are as
follows:
(1) That it must be done in good faith;
(2) That there must a one (1) month notice to the
DOLE and the employees; and
(3) There must be separation pay to employees
which is equivalent to one (1) month pay or
one-half (1/2) month pay for every year of
service, whichever is higher; but, according
to recent jurisprudence, if there are NO
losses at all, it must be one (1) month pay for
every year of service.
5. What if there were losses? Would the answer in
Number 4 be the same?
The answer would depend on whether the loss is
serious or not.
If the firm faces serious business losses or
financial reverses, the employer is not required
by law to pay separation pay. However, if the loss
or financial reverses are not so serious, the
employer is required to pay one month pay or
one-half month pays for every year of service,
whichever is higher, the fraction of 6 months
considered as one year.
3. What is a probationary employee?
A probationary employee is one who is under
observation by an employee to determine
whether or not he is qualified for permanent
employment.
Under the labor code, 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 standards made known by the
employer to the employee at the time of his
engagement.
An employee who is allowed to work after the
probationary period shall be considered a regular
employee.
The employer is, nonetheless, still required to
give 2 notices still: one to the DOLE and one to
the employees. Failure to comply with the
procedural requirement shall hold the employer
liable to pay indemnity for the violation of
procedural due process.
6. What are the 4 kinds of separation pay?
(a) Statutory requirement for authorized causes;
(b) Financial assistance (social justice);
(c) In lieu of reinstatement where reinstatement
is not feasible;
(d) Benefit in the CBA or company policy.
7. What are the consequences of illegal dismissal?
The following are the consequences of illegal
dismissal:
(1) Reinstatement. This has the consequence of
restoring the employee to his previous
position quo ante prior to the dismissal
without the loss of seniority rights and other
benefits;
(2) Backwages. It is the amount of money given
to the employee as compensation for
earnings lost from the time he or she was
illegally dismissed up to the time of actual
reinstatement. This includes basic pay and
benefits ordinarily enjoyed by the employee
including 13th month pay. Full backwages
should be paid;
(3) Separation pay in lieu of reinstatement. This
is required pursuant to the doctrine of
strained relations. The employees covered
under this usually includes those managerial
and supervisory employees who needs the
trust and confidence of management as a
prerequisite for continued employment;
(4) Damages. Damages can either be moral,
exemplary or nominal.
Moral damages may be awarded for the
besmirched reputation, wounded feelings,
mental anguish or sleepless nights which the
employee has suffered as a result of the
dismissal which was tainted with bad faith or
fraud.
Exemplary damages may be awarded in
case the dismissal was done in a wanton and
oppressive manner.
Nominal damages may be awarded when the
procedural due process requirements are not
complied with.
8. Discuss the prescription of actions in labor.
1 year – for unfair labor practices from the time of
accrual of such unfair labor practice;
4 years – action for reinstatement by reason of
illegal dismissal which shall from the time of
dismissal; and
3 years – action for money claims which runs
from the time the cause of action accrued.
9. What are the just causes for termination?
SGFCO
JUST CAUSES (Art. 296, as amended)
(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 member of his family or his duly
authorized representative; and
(e) Other cases analogous to the foregoing.
10. What is a fixed-period contract of employment?
Fixed period employment contracts are not
limited to those which are seasonal or for specific
projects with predetermined dates of completion;
they also include those to which the parties by
free choice have assigned a specific date of
termination.
The case of Brent Schoo, Inc. vs Zamora laid
down the requisites for a valid fixed-period
employment contract, viz:
(1) The fixed period of employment was
KNOWINGLY and VOLUNTARILY agreed
upon by the parties without any fraud,
duress, or improper pressure;
(2) It appears that the employer and employee
dealt with each other on a, more or less,
equal terms with no MORAL DOMINANCE
exercised by the former or the latter.
11. Who are regular employees?
The labor code provides that the provisions of
written contracts to the contrary notwithstanding
and regardless of the oral agreement of the
parties, an employee shall be deemed regular if
he has been engaged to perform activities which
are usually necessary or desirable in the usual
business or trade of the employer.
12. Who are fixed-term or project employees and
seasonal employees?
Even if employees are engaged to perform
activities which are usually necessary or
desirable in the in the usual trade or business of
the employer, they are not regular employees
where:
(1) the employment has been fixed for a specific
project or undertaking the completion of
which has been determined at the time of the
engagement of the employee; or
(2) where the work or services to be performed
is seasonal in nature and the employment is
for the duration of the season;
The first is classified as project
employees whereas the second are considered
seasonal employees.
13. Who are casual employees?
Where an employee does not fall under the
category of regular, project or seasonal
employees, such employee shall be deemed a
casual employee; except when such employee
has performed more than one (1) year, whether
continuous or broken. In which case, they shall
be deemed regular employees.
14. Can seasonal employees be considered regular?
Yes, a seasonal employee can become a regular
employee if his contract is successively renewed
every season for a period exceeding one year
and provided that he is engaged to perform
activities which are usually necessary or
desirable in the usual trade or business of the
employer.
The regular seasonal employees are not, strictly
speaking, separated from the service during offseason but are merely considered as on leave of
absence without pay until they are re-employed.
Their employment relationship is not severed but
is merely suspended.
15. Can a project employee become a regular
employee?
Yes, jurisprudence provides that a project
employee or a member of a workpool may
acquire the status of regular when the following
concur:
(1) There is continuous rehiring of project
employees even after cessation of a project;
and
(2) The tasks performed by the alleged “project
employee” are vital, necessary and
indispensable to the usual business or trade
of the employer.
16. Can casual
employees?
employees
become
regular
Yes, when the casual employee has provided for
services to the employer for more than one year,
whether continuous or broken.
17. What is preventive suspension? Discuss its
nature and extent.
Preventive suspension is the means by which an
employer precludes the employee from reporting
for work and performing his work thereunder for
the protection of the company’s property pending
investigation of any alleged malfeasance or
misfeasance committed by the employee.
The implementing rules of the labor code
provides that the employer may place the worker
concerned under preventive suspension if his
continued employment poses a serious and
imminent threat to the life or property of the
employer or of his co-workers.
The main purpose of preventive suspension is to
provide the management or the appropriate
investigation committee the chance to thoroughly
examine the circumstances and the extent of the
alleged malfeasance. If the employee is not
preventively suspended, he or she may tamper
with the evidence necessary for the proper
investigation of the offense.
The preventive suspension must not exceed 30
days; otherwise, it would be deemed a
constructive
dismissal.
Nonetheless,
management has the discretion to extend the
preventive suspension provided that it reinstates
the employee under preventive suspension to its
payroll and resume paying him his pay even if he
is not physically present and dispensing his job.
18. Discuss the retirement.
Retirement is the result of bilateral act of the
parties, a voluntary agreement between the
employer and the employee whereby the latter,
after reaching a certain age, agrees and/or
consents to sever his employment with the
former.
The labor code provides that unless through a
Collective Bargaining Agreement or other
employment contract providing for greater
benefits, an employee upon reaching the age of
60 or the compulsory age of retirement of 65
years old, who has served the company for at
least 5 year, may retire and shall be entitled to
one-half month pay for every year of service, a
fraction of 6 months shall be deemed one year.
Unless the parties provide for broader inclusions,
the term one-half month pay shall mean 15 days
plus one-twelfth of the 13 th month pay and cash
equivalent of no more than 5 days of service
incentive leaves.
In simpler terms, it is approximately 22.5 days for
every year of service.
This law does not apply to:
(1) Domestic household servants;
(2) Retail,
service,
and
agricultural
establishments employing no more than 10
employees;
(3) Government employees; and
(4) Underground mining employees who may
retire upon reaching age 50 but not to
exceed 60 years old, being their compulsory
age of retirement, and who having served at
least 5 years in the company
19. What are the four authorized causes? Explain
each.
The authorized causes for termination are as
follows:
(a) Introduction of labor-saving devices – this
include the substitution of manual labor in
factories by machineries and equipment; it
may also include the outsourcing of several
departments of the company which may
include its security, janitorial and
maintenance departments, and such other
management prerogative to cut labor
expenditures;
(b) Redundancy – occurs when there is
superfluity of in the labor force of a company
such as when there is an excess of what
may be required in the operations of the
business. This arises as a result of
overhiring, or a closure of certain business or
product line and such other circumstances
where certain employee functions are
deemed superfluous.
(c)
Retrenchment – occurs when there is
imminent or actual losses experienced by the
employer and it becomes necessary to
terminate some employees in order to
prevent worsening the company’s financial
condition. This is distinguished from
redundancy in the sense that in redundancy,
there is yet no imminent or actual loss by the
company, though both redundancy and
retrenchment may have the same causes.
(d) Closure of business – this may be due to
serious business losses or financial reverses
or not. If case of serious business losses or
financial reverses, a business indefinitely
suspends operations and therefore ceases to
employ the workers. If not due to serious
business losses or financial reverses, it may
be one caused by merger, consolidation, or
sale in good faith by the employer of his
business or it may also be just the decision
of the employer to cease operations in good
faith.
20. What are the obligations of the employer if it
terminates an employee for authorized cause?
First of all, the employer is duty bound to give
notice, at least 30 days before effecting the
termination, written notices to both the
appropriate Regional Office of the DOLE and the
employee. The notice required is individual
notice. Thus, notice in the bulletin board is
insufficient as this is collective notice.
The employer is also duty bound to pay
separation pay depending on the reason for the
termination, viz:
(1) For introduction of labor-saving devices
and/or redundancy the employer is required
to pay a separation pay equivalent to one
month pay or one month pay for every year
of service, whichever is higher, fraction of 6
months is considered 1 year;
(2) For retrenchment and/or closure of business
NOT due to serious business losses or
financial reverses, the employer is required
to pay separation pay equivalent to one
month or one-half month pay for every year
of service, whichever is higher, fraction of 6
months considered 1 year.
(3) For closure of business due to serious
business loses or financial reverses, no
separation pay is required.
The employer in dismissing the employee must
also be in good faith such that the termination of
employment is not merely on inexistent grounds
and should not be made to subterfuge in order to
get rid of unwanted employees or to subvert the
impending organization of labor, in which case, it
shall tantamount to unfair labor practice.
If the termination is due to losses, there must be
sufficient evidence that the loss is grave enough
to justify the termination of employment.
21. What are the four kinds of separation pay?
(a) Separation pay as employer’s statutory
obligation in cases of legal termination due to
authorized causes;
(b) Separation pay as financial assistance, as an
act of social justice, even in case of legal
dismissal, at court’s discretion;
(c) Separation pay in lieu of reinstatement in
illegal dismissal cases where the employee
is ordered reinstated but reinstatement is
infeasible; and
(d) Separation pay as an employment benefit
granted in a CBA or company policy.
22. Define resignation.
Resignation is a voluntary act of the employee
where his personal reason cannot be sacrificed
over the urgency of service, and he has no
choice but to disassociate himself from the
company.
23. How may an employee terminate employeremployee relationship without just cause?
An employee may terminate without just cause
the EE relationship by serving a written notice on
the employer at least one (1) month in advance;
the employer upon whom no such notice was
given may hold the employee liable.
24. How may an employee terminate employeremployee relationship without giving notice?
An employee may terminate the EE without
serving notice to employer for any of the
following causes:
(1) Serious insult by the employer or his
representative on the honor and person
of the employee;
(2) Inhuman and unbearable treatment
accorded the employee by the employer
or his representative;
(3) Commission of a crime or offense by the
employer or his representative against
the person of the employee or any of the
immediate member of his family; and
(4) Other cases analogous to the foregoing.
JUST CAUSE
Grounds
Procedural due
process
Consequences
(1) Serious misconduct or willful
disobedience by the employee of
the lawful orders of his employer or
representative in connection with his
work;
(2) Gross and habitual neglect by the
employee of his duties;
(3) Fraud or willful breach by the
employee of the trust reposed on
him by his employer or duly
authorized representative;
(4) 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
(5) Other analogous causes to the
foregoing.
(1) Written notice specifying the ground
for termination;
(2) Hearing or conference during which
an employee is given the
opportunity to respond to the
charge, present his evidence, or
rebut the evidence presented
against him (opportunity to be
heard);
Note: reasonable opportunity to be
heard is at least 5 days
(3) Written notice of termination.
-General rule:
No financial assistance required
-Exception:
For analogous cases (No. 5 ground), the
court may opt to grant separation pay
anchored on social justice.
AUTHORIZED CAUSE
(1)
(2)
(3)
(4)
Installation of labor-saving device;
Redundancy;
Retrenchment to prevent losses;
Closure or cessation of operation of
establishment/undertaking
(a) Due to serious business losses or
financial reverses; and
(b) Not due to serious business losses or
financial reverses
(5) Disease where his continued employment is:
(a) Prohibited by law;
(b) detrimental to his health; or
(c) detrimental to his co-workers
COMP
Work is co
Service of written notice (two-notice requirement) at
least 30 days before effectivity to:
(1) The appropriate Regional Office of the
DOLE; and
(2) The employees
No notice r
must repor
nearest Pu
statistical p
-For (1) and (2): 1 month pay or 1 month pay for
every year of service, whichever is higher, 6mos=1yr
-For (3) and (4-B): 1 month pay or ½ month pay for
every year of service, whichever is higher, 6mos=1yr
-For (4-a): none required
-For (5): 1 month pay or ½ month pay for every year
of service, whichever is higher, 6mos=1yr
None
