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RECENT SUPREME COURT RULINGS FOUND ON ITS DECISIONS DEALING WITH TERMINATION DISPUTES AS PUBLISHED IN THE SCRA By DEAN FROILAN M. BACUNGAN
I.EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP 5-1. Appointment letters or employment contracts, payrolls, organization charts, SSS registration, personnel list, as well as testimony of co-employees, may serve as evidence of employee status; While technical rules are not strictly followed in the NLRC, this does not mean that the rules on proving allegations are entirely ignored. McLeod vs. National Labor Relations Commission, 512 SCRA 222. 59-1. The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct, or the so-called control test, considered to be the most important element. Coca-Cola Bottlers (Phils.), Inc. vs. Climaco, 514 SCRA 164. 64-1. Drivers like Lebatique, are under the control and supervision of management officers. Lebatique, therefore, is a regular employee whose tasks are usually necessary and desirable to the unusual trade and business of the company. Thus, he is entitled to the benefits accorded to regular employees of Far East, including overtime pay and service incentive leave pay. Far East Agricultural Supply, Inc. vs. Lebatique, 515 SCRA 491. 66-1. The relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-employee and not of lessor-lessee. Gabriel vs. Bilon, 515 SCRA 29. 84. Elements constituting the reliable yardstick whenever the existence of an employment relationship is in dispute; An employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end. Pacific Consultants International Asia, Inc. vs. Schonfeld, 516 SCRA 209 When there is no employer-employee relationship 60-2. There is nothing wrong with the employment of a doctor as a company retained physician; Where there is no employer-employee relationship between the parties, the termination of the Retainership Agreement, which is accordance with the provisions of the Agreement, does not constitute illegal dismissal of the retained physician. Coca-Cola Bottlers (Phils.), Inc. vs. Climaco, 514 SCRA 164. KINDS OF EMPLOYER-EMPLOYEE RELATIONSHIP 74-7. A contract of employment stipulating a fixed-term, even if clear as regards the existence of a period, is invalid if it can be shown that the same was executed with the intention

of circumventing security of tenure, and should thus be ignored. Fabela vs. San Miguel Corporation, 515 SCRA 288. 85-1. Even is 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. Caparoso vs. Court of Appeals, 516 SCRA 30. 121-17. The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the casual business or trade of the employer. Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691. 163-7. Probationary employees, while not entitled to permanent status, are still entitled to the constitutional protection of security of tenure. Espina vs. Court of Appeals, 519 SCRA 327. 196-1. The applicable formula to ascertain whether an employment should be considered regular or non-regular is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 197-2. As defined, project employees are those workers hired 1) for a specific project or undertaking and 2) the completion or termination of such project or undertaking has been determined at the time of the engagement of the employee. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 198-3. The absence of a definite duration for the project/s has led the Court to conclude that respondents are, in fact, regular employees. PNOC-Energy Development Corp., vs. National Labor Relations, Commission, 521 SCRA 222. 199-4. It must be stressed that a contract that misuses a purported fixed-term employment to block the acquisition of tenure by employees deserves to be struck down for being contrary to law, morals, good customs, public order and public policy. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 200-5. In Filipinas Pre-Fabricated Building Systems (Filsystems), Inc. vs. Puente (453 SCRA 820, 2005), the Court ruled that the length of service of a project employee is not the controlling test of employment tenure but whether or not the employment has been fixed for a specific project or undertaking the completion and termination of which has been determined at the time of the engagement of the employee. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 206-6. As regular workers, respondents are entitled to security of tenure under Article 279 of the Labor Code and can only be dismissed for a just or authorized cause. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 210-10. An employer has the recognized right and prerogative to select the persons to be hired and to designate the work as well as the employee or employees to perform it. Soriano, Jr. vs. National Labor Relations Commission, 521 SCRA 526. 118-14. An objection founded on the ground that one has better credentials over the appointee is frowned upon so long as the latter possesses the minimum qualifications for the position. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 226-5. Granting that respondent was merely a probationary employee, he was still entitled to security of tenure and may only be terminated for a just cause or when he fails to

qualify as a regular employee in accordance with reasonable standards made known to him by petitioner at the time of his engagement. Alay sa Kapatid International Foundation, Inc. (AKAP) vs. Dominguez, 524 SCRA 719. 231-4. The practice of having fixed-term contracts in the broadeast industry does not automatically make all talent contracts valid and complaint with labor law the assertion that a talent contract exists does not necessarily prevent a regular employment status. Dumpit-Murillo vs. Court of Appeals, 524 SCRA 350. 232-5. The law does not preclude the employer from terminating the probationary employment, if the employer finds that the probationary employee is not qualified for regular employment. The law in protecting the rights of the laborer authorizes neither the oppression nor the self-destruction of the employer. Pasamba vs. National Labor Relations Commission, 524 SCRA 350. 247-2. The provision which states that the probationary period shall not exceed six months means that the probationary employee may be dismissed for cause at any time before the expiration of six months after hiring. Pasamba vs. National Labor Relations Commission, 524 SCRA 350. 103-1. Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period. Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691. 104-2. Although Article 280 of the Labor Code, as amended, does not forbid fixed term employment, it must, nevertheless, meet any of the following guidelines in order that it cannot be said to circumvent security of tenure: (1) that the fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or (2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691. 248-3. An employer, such as a medical center, cannot be compelled to continue employing a probationary employee who, as early as three months after she was hired, had shown herself inclined to violate the more serious of the companys rules. Pasamba vs. National Labor Relations Commission, 524 SCRA 350. 249-4. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. Consolidated Broadcasting System, Inc. vs. Oberio, 524 SCRA 365. 250-5. Granting that respondent was merely a probationary employee, he was still entitled to security of tenure and may only be terminated for a just cause or when he fails to quality as a regular employee in accordance with reasonable standards made known to him by petitioner at the time of his engagement. Alay sa Kapatid International Foundation, Inc. (AKAP) vs. Dominguez, 524 SCRA 719. 251-1. Project or contractual employees are required to be apprised of the project they will undertake under a written contract. Consolidated Broadcasting System, Inc. vs. Oberio, 524 SCRA 365.

256-4. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. 258-6. Employers who hire project employees are mandated to state and, once its veracity is challenged, to prove the actual basis for the latters dismissal. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. 275-23. Confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate investigation such employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws. Philippine Transmarine Carriers, Inc. vs. Carilla, 525 SCRA 586. 290-2. Employers who hire project employees are mandated to state and, once it veracity is challenged, to prove the actual basis for the latters dismissal. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. 291-1. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. 292-2. The practice of submitting evidence late lie in a motion for reconsideration before the Court of Appeals cannot be tolerated, for it defeats the speedy administration of justice involving poor workers, aside from being unfair. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. II. TERMINATION OF EMPLOYMENT BY THE EMPLOYER 100-3. The legal principle that the employer has the onus pro-bandi to show that the employees separation from employment is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause presupposes that there is indeed an involuntary separation from employment and the facts attendant to such forced separation was clearly established. Portuguez vs. GSIS Family Bank (Comsavings Bank), 517 SCRA 309. Abandonment 43-11. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever the employee-employer relationship. Angeles vs. Fernandez, 513 SCRA 378. 80-13. To constitute abandonment as a just cause for dismissal, there must be: a) absence without justifiable reason; and b) a clear intention, as manifested by some overt act, to sever the employer-employee relationship. Far East Agricultural Supply, Inc. vs. Lebatique, 515 SCRA 491. 186-9. It bears emphasis that for termination of employment on the ground of abandonment to be considered valid, the employer must prove, by substantial evidence, the concurrence of two essential requisites: At first, the failure of the employee to report for work or his absence from work without valid or justifiable reason; and second, his clear and deliberate intention to discontinue his employment. NS Transport Services, Inc. vs. Zeta, 520 SCRA 261. 189-12. Whether an employee abandoned his job or was illegally dismissed are questions of fact better left to quasi-judicial agencies to determine. Mame vs. Court of Appeals, 520 SCRA 552.

Resignation 19-10. If indeed an employee was made to resign against her will, she should not have allowed a considerable length of time to elapse before enforcing her rights allegedly violated. Amkor Technology Philippines, Inc. vs. Juangco, 512 SCRA 325. 99-2. There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. Duldulao vs. Court of Appeals, 517 SCRA 191. 100-3. The legal principle that the employer has the onus pro-bandi to show that the employees separation from employment is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause presupposes that there is indeed an involuntary separation from employment and the facts attendant to such forced separation was clearly established. Portuguez vs. GSIS Family Bank (Comsavings Bank), 517 SCRA 309. Suspension of Operation by the Employer Floating Status 94-10. A floating status requires the dire exigency of the employers bona fide suspension of operation of a business or undertaking; When a security guard is placed on a floating status he does not receive any salary or financial benefit provided by law. Pido vs. National Labor Relations Commission, 516 SCRA 609. Valid reason needed 2-2. An employer cannot discharge this burden of proving that there is a just cause for the dismissal of an employee by merely alleging that it did not dismiss the employee. Seven Star Textile Company vs. Dy, 512 SCRA 486. Suspension 95-11. If employer chooses to extend the period of suspension, he is required to pay the wages and other benefits due the worker and the worker is not bound to reimburse the amount paid to him during the extended period of suspension even if after the completion of the hearing or investigation the employer decides to dismiss him. Pido vs. National Labor Relations Commission, 516 SCRA 609. III. TWO PREREQUISITES FOR TERMINATION EMPLOYER MAYBE DEEMED LEGAL VALID REASONS FOR TERMINATION 147-12. It is a well-established rule that the employer has the burden of proving a valid dismissal of an employee, for which two requisites must concur. Cabalen Management Co., Inc., vs. Quiambao, 518 SCRA 342. 148-13. To establish a just or authorized cause for dismissal, substantial evidence or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion is required. Cabalen Management Co., Inc., vs. Quiambao, 518 SCRA 342. OF EMPLOYMENT BY

III. TWO PREREQUISITES FOR TERMINATION OF EMPLOYMENT BY EMPLOYER MAYBE DEEMED LEGAL 159-3. For dismissal to be valid, the evidence must be substantial and not arbitrary and must be founded on clearly established facts. Philippine Long Distance Telephone Co., Inc. vs. Balbastro, 519 SCRA 233. 160-4. The benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the employer. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an imjustice to the employer justitia nemini neganda est (Justice is to be denied to none). Philippine Long Distance Telephone Co., Inc. vs. Balbastro, 519 SCRA 233. 224-3. In labor cases, the employer has the burden of proving that the dismissal was for a just cause; failure to show this would necessarily mean that the dismissal was unjustified and, therefore, illegal. Consolidated Broadcasting System, Inc. vs. Oberio, 524 SCRA 365. 225-4. If doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. Consolidated Broadcasting System, Inc. vs. Oberio, 524 SCRA 365. 233-6. A hospital is engaged in a business whose survival is dependent on the reputation of its medical practitioners; An employer cannot be compelled to retain an employee who is guilty of acts inimical to the interest of the employer. Pasamba vs. National Labor Relations Commission, 524 SCRA 350. 273-21. A dismissed employee is not required to prove his innocence of the charges leveled against him by is employer. Philippine Transmarine Carriers, Inc. vs. Carilla, 525 SCRA 586. 275-23. Confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate investigation such employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws. Philippine Transmarine Carriers, Inc. vs. Carilla, 525 SCRA 586. 298-2. In termination of employment disputes, the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. A. JUST CAUSES Serious Misconduct 70-3. An employee commits serious misconducts if he falsely accuses his immediate superior of robbery. Torreda vs. Toshiba Information Equipment (Phils.), Inc., 515 SCRA 133. 86-2. Misconduct has been defined as an improper or wrong conduct, and to be categorized as serious, it must be of such grave and aggravated character and not merely trivial and unimportant. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 132-1. This Court found that the misconduct committed was not related with the employees work as the offensive remarks were verbally made during an informal Christmas gathering of the employees, an occasion where tongues are more often that not loosened by liquor or other alcoholic beverages and it is to be expected that employees freely express their

grievances and gripes against their employers. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 133-2. In Autobus Workers Union (AWU) vs. NLRC [291 SCRA 219 (1998)], where dismissal was held to be an appropriate penalty for uttering insulting remarks to the supervisor. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 134-3. Lack of urgency on the part of the respondent company in taking any disciplinary action against [the employee] negates its charge that the latters misbehavior constituted serious misconduct. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 138-3. This Court found that the misconduct committed was not related with the employees work as the offensive remarks were verbally made during an informal Christmas gathering of the employees, an occasion where tongues are more often that not loosened by liquor or other alcoholic beverages and it is to be expected that employees freely express their grievances and gripes against their employers. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 167-11. The acts of an airline employee in offering a passenger the services of the airlines, without compensating for the same, while at the same time exacting a fee for himself, are undoubtedly inimical to the interest of his employer. Barba vs. Court of Appeals, 519 SCRA 448. 217-3. Misconduct is an improper or wrong conduct, a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful and character, implies wrongful intent and not mere error of judgment. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. 218-4. Although fighting within company premises may constitute serious misconduct, not every fight within company premises in which an employee is involved would automatically warrant dismissal from service. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. 219-5. It is cruel and unjust to impose the drastic penalty of dismissal if not commensurate to the gravity of the misdeed. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. 282-30. For misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the service would be patently inimical to his employers business. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. 297-1. For misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the service would be patently inimical to his employers business. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Willful Disobedience 71-4. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees. Torreda vs. Toshiba Information Equipment (Phils.), Inc., 515 SCRA 133.

75-8. To allow her to continue with her employment puts respondent under the risk of being embroiled in unnecessary lawsuits from customers similarly situated as Josefina, et al. Clearly, respondent exercised its management prerogative when it dismissed petitioner. Panuncillo vs. CAP Philippines, Inc., 515 SCRA 323. 137-2. Given to reasonableness of Geiserts decision that provoked petitioner to send the second e-mail message, the observations of the Court of Appeals that the message resounds of subversion and undermines the authority and credibility of management and that petitioner displayed a tendency to act without managements approval, and even against managements will are well taken. 245-4. An employee has no valid reason to disobey the order of transfer given by management, especially if he has tacitly given his consent thereto when he acceded to the companys policy of hiring sales staff who are willing to be assigned anywhere in the Philippines which is demanded by the employers business; By the every nature of their employment, sales executives are expected to travel. Tinio vs. Court of Appeals, 524 SCRA 533. 284-32. Even when an employee is found to have transgressed the employers rules, in the actual imposition of penalties upon the erring employees, consideration must still be given to his length of service and the number of violations committed during his employment. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Gross and Habitual Neglect of Duties 50-18. Jurisprudence recognizes as a valid ground for dismissal of an employee unauthorized use of company time. Capitol Wireless, Inc. vs. Balagot, 513 SCRA 672. 187-10. The best evidence of absenteeism or absence without official leave (AWOL) would have been the signed original or certified true copies of Zetas daily time records, which are all accessible to NS Transport Services, Inc. (NSTSI). NS Transport Services, Inc. vs. Zeta, 520 SCRA 261. Fraud/Willful Breach of Trust 37-5. Art. 277 (b) in relation to Art. 264 (a) and (e) recognizes the right to due process of all workers, without distinction as to the cause of their termination. Suico vs. National Labor Relations Commission, 513 SCRA 325. 46-14. The right of employers to dismiss employees by reason of loss of trust and confidence especially in cases of employees occupying positions of responsibility on the premise that an employee concerned holds a position of trust and confidence long recognized by law and jurisprudence. Norsk Hydro (Phils.), Inc. vs. Rosales, Jr., 513 SCRA 583. 86-2. Misconduct has been defined as an improper or wrong conduct, and to be categorized as serious, it must be of such grave and aggravated character and not merely trivial and unimportant. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 47-15. Proof beyond reasonable doubt is not needed to justify the loss of trust and confidence on the responsible officer. Norsk Hydro (Phils.), Inc. vs. Rosales, Jr., 513 SCRA 583. 87-3. A breach of trust is willful if it is done intentionally, knowingly and purposely without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 88-4. The standard of substantial evidence is satisfied where the employer has reasonable ground to believe that the employee is responsible for the misconduct which renders him

unworthy of the trust and confidence demanded by his position. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 89-5. A managerial employee is bound by more exacting work ethics. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 96-12. More than most key positions, that of cashier calls for utmost trust and confidence-in dismissing a cashier on the ground of loss of confidence, it is sufficient that there is some basis for the same or that the employer has a reasonable ground to believe that the employee is responsible for the misconduct, thus making him unworthy of the trust and confidence reposed in him. Caeda vs. Philippine Airlines, Inc., 516 SCRA 668. 107-3. Under any standard, the work of the bookkeeper and bank assistant branch head, charged with preparing financial reports and monthly bank reconciliations, as well as head of the Accounting Department of a branch, constitutes supervisory and administrative tasks which entail great responsibility. Rural Bank of Cantilan, Inc. vs. Julve, 517 SCRA 17. 179-2. Mere failure to comply with the notice requirement of labor laws on company closure or dismissal of employees does not amount to a patently unlawful act. Carag vs. National Labor Relations Commissions, 520 SCRA 28. 197-2. As defined, project employees are those workers hired 1) for a specific project or undertaking and 2) the completion or termination of such project or undertaking has been determined at the time of the engagement of the employee. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. Commission of a Crime Analogous Cases 4-4. Through flight, one derogates the course of justice by avoiding arrest, detention, or the institution or continuance of criminal proceedings; The act of hiding to evade arrest and ward off the long arm of the law does not constitute a valid or justifiable reason for not reporting for work. Camua, Jr. vs. National Labor Relations Commission, 512 SCRA p. 677. Disease 288-36. While the Constitution does not condone wrongdoing by an employee, it nevertheless urges a moderation of the sanction that may be applied to him where a penalty less punitive would suffice, whatever missteps may have been committed by the worker ought not to be visited with a consequence so severe such as dismissal from employment. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Compulsory Retirement Penalty Imposed B.AUTHORIZED CAUSES 161-5. Work is a necessity that has economic significance deserving legal protection; Employers are also accorded rights and privileges to assure their self-determination and independence and reasonable return of capital, and this mass of privileges comprises the socalled management prerogatives; 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. Espina vs. Court of Appeals, 519 SCRA 327.

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Installation of labor-Saving Device Redundancy 209-9. Redundancy exists when the service capability of the work-force is in excess of what is reasonably needed to meet the demands of the business enterprise. Soriano, Jr. vs. National Labor Relations Commission, 521 SCRA 526. Retrenchment Closing or Cessation of Operation 162-6. The phrase closure or cessation of operations of establishment or undertakings includes a partial or total closure or cessation, and the phrase closure or cessation not due to serious business losses or financial reverses recognizes the right of the employer to close or cease its business operations or undertakings even in the absence of serious business losses or financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service. Espina vs. Court of Appeals, 519 SCRA 327. 179-2. Mere failure to comply with the notice requirement of labor laws on company closure or dismissal of employees does not amount to a patently unlawful act. Carag vs. National Labor Relations Commissions, 520 SCRA 28. End of Period of Employment Management Prerogative 105-1. Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees; Employees are not excused from complying with valid company policies and reasonable regulations for their governance and guidance. Rural Bank of Cantilan, Inc. vs Julve, 517 SCRA 17. 115-11. No malice or ill-will can be imputed upon an employer where the separation of an employee is undertaken by it conformably to an existing statute-justice, fairness and due process demand that an employer should not be penalized for situations where it had no participation or control. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 116-12. The prerogative to determine the place or station where an employee is best qualified to serve the interests of the company on the basis of his or her qualifications, training and performance belongs solely to the employer. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 117-13. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 122-18. The Supreme Court will not interfere with the business judgment of an employer in the exercise of its prerogative to devise means to improve its operations, provided that it does not violate the law, the CBAs, and the general principles of justice and fair play. Manila Jockey Club Employees Labor Union-PTGWO vs. Manila Jockey Club, Inc., 517 SCRA 707.

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123-19. The partiality for labor has not in any way diminished the Courts belief that justice in every case is for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine. Manila Jockey Club Employees Labor Union-PTGWO vs. Manila Jockey Club, Inc., 517 SCRA 707. 136-1. It is settled that it is the prerogative of management to regulate, according to its discretion and judgment, all aspects of employment. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 242-1. Labor laws discourage interference with an employers judgment in the conduct of his business. Tinio vs. Court of Appeals, 524 SCRA 533. 243-2. An employees right to security of tenure does no give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. Tinio vs. Court of Appeals, 524 SCRA 533. 244-3. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play having the right should not be confused with the manner in which the right is exercised. Tinio vs. Court of Appeals, 524 SCRA 533. 285-33. Management prerogatives are upheld so long as they are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws and valid agreements; The Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it may terminate an employee for a just cause, such prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. IV. REMEDIES IN CASE OF UNJUST DSMISSAL Reinstatement 78-11. If a Labor Arbiter does not issue a writ of execution of the NLRC order for the reinstatement of an employee even if there is no restraining order, he could probably be merely observing judicial courtesy, which is advisable if there is a strong probability that the issues before the higher court would be rendered moot and moribund as a result of the continuation of the proceedings in the lower court. Panuncillo vs. CAP Philippines, Inc., 515 SCRA 323. 79-12. If during the pendency of the review no order is issued by the courts enjoining the execution of a decision of the Labor Arbiter or NLRC which is favorable to an employee, the Labor Arbiter or the NLRC must exercise extreme prudence and observe judicial courtesy when the circumstances so warrant if we are to heed the injunction of the Court in Philippine Geothermal, Inc. v. NLRC [236 SCRA 371 (1994)]. Panuncillo vs. CAP Philippines, Inc., 515 SCRA 323. 93-9. Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. Aguilar vs. Burger Machine Holdings Corporation, 516 SCRA 609. 135-4. Petitioner, having been dismissed for just cause, is neither entitled to reinstatement nor to back wages. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 221-7. The reinstatement aspect of the Labor Arbiters decision, albeit under appeal, is immediately enforceable. While it is incumbent upon the party to take an active role in his case and not adopt a wait-and-see attitude, the NLRC as an adjudicating body has the corresponding

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obligation to act promptly on all incidents brought before it. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. 286-34. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to the payment of 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. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. 293- An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to the payment of 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. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Back wages Damages 3-3. Moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. Elcee Farms, Inc. vs. National Labor Relations Commission, 512 SCRA p.602. 115-11. No malice or ill-will can be imputed upon an employer where the separation of an employee is undertaken by it conformably to an existing statute-justice, fairness and due process demand that an employer should not be penalized for situations where it had no participation or control. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 287-35. The award of attorneys fees is proper and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages what is important is merely a showing that the lawful wages were not paid accordingly, as in the instant controversy. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Liability 180-3. Article 212(e) of the Labor Code, by itself, does not make a corporate officer personally liable for the debts of the corporation. Carag vs. National Labor Relations Commissions, 520 SCRA 28. 220-6. An officer cannot be held solidarily liable with petitioner Supreme Steel Pipe Corporation (SSPC) for the termination of respondents employment, since there is no showing that the dismissal was attended with malice or bad faith. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. V. REQUIREMENTS OF DUE PROCESS 37-5. Art. 277 (b) in relation to Art. 264 (a) and (e) recognizes the right to due process of all workers, without distinction as to the cause of their termination. Suico vs. National Labor Relations Commission, 513 SCRA 325. 38-6. 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 DOLE such as Rule XXII of the Implementing Rules of Book V. Suico vs. National Labor Relations Commission, 513 SCRA 325

13

39-7. Company policies or practices are binding on the parties. Suico vs. National Labor Relations Commission, 513 SCRA 325. 40-8. Under Systems Practice No. 94-016, PLDT granted its employee the alternative of either filing a written answer to the charges or requesting for opportunity to be heard and defend himself with the assistance of the counsel or union representative, if he so desires. Suico vs. National Labor Relations Commission, 513 SCRA 325. 42-10. In labor cases, an opportunity to seek a reconsideration of the action or ruling complained of amounts to due process. Angeles vs. Fernandez, 513 SCRA 378. 54-2. 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. Suico vs. National Labor Relations Commission, 513 SCRA 325. 56-4. Under Systems Practice No. 94-016, PLDT granted its employee the alternative of either filing a written answer to the charges or requesting for opportunity to be heard and defend himself with the assistance of the counsel or union representative, if he so desires. Suico vs. National Labor Relations Commission, 513 SCRA 325. 69-2. Court agrees with the labor arbiter and the Court of Appeals that respondents were illegally dismissed by petitioners; Respondents were not accorded due process. Gabriel vs. Bilon, 515 SCRA 29. 74-7. A contract of employment stipulating a fixed-term, even if clear as regards the existence of a period, is invalid if it can be shown that the same was executed with the intention of circumventing security of tenure, and should thus be ignored. Fabela vs. San Miguel Corporation, 515 SCRA 288. 77-10. Parenthetically, when an employee admits the acts complained of, as in petitioners case, no formal hearing is even necessary. Panuncillo vs. CAP Philippines, Inc., 515 SCRA 323. 164-8. Procedural due process requires the employee be given two written notices before he is terminated, consisting of a notice which apprises the employee of the particular acts/omissions for which the dismissal is sought and the subsequent notice which informs the employee of the employers decision to dismiss him. Espina vs. Court of Appeals, 519 SCRA 327. 178-1. While labor arbiters are not required to conduct a formal hearing or trial, they have no license to dispose with the basic requirements of due process such as affording respondents the opportunity to be heard. Carag vs. National Labor Relations Commissions, 520 SCRA 28. Indemnity of those is no due process 41.9. Consistent with the ruling in Agabon, the procedural deficiency in the dismissal of Suico, et. Al. did not affect the validity or effectivity of the dismo\issal as the substantive bases thereof were never put in issue. Suico vs. National Labor Relations Commission, 513 SCRA 325. 227-6. Where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal or render it illegal or ineffectual; Employer should indemnify the employee in the form of nominal damages for the violation of his right to statutory due process. Alay sa Kapatid International Foundation, Inc. (AKAP) vs. Dominguez, 524 SCRA 719.

14

VI. STATUTE OF LIMITATION 47-15. Proof beyond reasonable doubt is not needed to justify the loss of trust and confidence on the responsible officer. Norsk Hydro (Phils.), Inc. vs. Rosales, Jr., 513 SCRA 583. 166-10. In illegal dismissal cases, the employee concerned is given a period of four years from the time of his dismissal within which to institute a complaint, which period shall commence to run only upon the accrual of a cause of action of the worker. Victory Liner, Inc. vs. Race, 519 SCRA 356. 188-11. In Angeles vs. Fernandez (513 SCRA 378 [2007]), we held that the fact that the filing of the complaint by the employee 20 months after dismissal is a non-issue. NS Transport Services, Inc. vs. Zeta, 520 SCRA 261.

bar.review&mcle.lecture/2007.sc.rulings.on.termination

IMPORTANT CASE PRINCIPLES IN LABOR LAW I. THE APPLICABLE LAWS

1.

The Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and placement activities. The circulars are reasonable, valid and justified under the general welfare clause of the Constitution, since the recruitment and deployment business, as it is conducted today, is affected with public interest.

2.

It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. As stated in the Labor Code, all doubts in the implementation and the interpretation of the Labor Code shall be resolved in favor of labor, in order to give effect to the policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers, and to assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

II. BASIC PRINCIPLES

1.

Although the contract provided for the rules and regulations to be followed, the same are intended to govern the conduct of the business as provided for in the Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits.

2.

In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises and grounds of whatever club they do their work in. They work without having to observe any working hours, free to leave anytime they please, to stay away for as long as they like. All these considerations clash frontally with the concept of employment.

3.

Under the control test, an ER-EE relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and means to used in reaching that end. The different memoranda issued by the company were merely guidelines on company policies which the sales managers follow and impose on their respective agents. Nevertheless, Limjoco and the other agents were free to conduct and promote their sales operations. The periodic reports to the petitioner by the

15
agents were but necessary to update the company of the latter's performance and business income.

4.

Economic Reality Test- involves the underlying economic realities of the activity or relationship such as a. the extent to which the services performed are an integral part of the ERs business b. the extent of the workers investment in equipment and facilities c. the nature and degree of control exercised by the employer d. workers opportunity for profit and loss

e. amt of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise f. permanency and duration of the relationship between worker and employer g. degree of dependency of the worker upon the ER for his continued employment in that line of business

Under the Economic Reality Test, she is also deemed an employee because she had served the company for 6 years before dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances and deductions and SSS contributions. Petitioner is therefore economically dependent on respondent corp for her continued employment in the latters line of business.

5.

In the selection and engagement of respondents, no peculiar or unique skill, talent or celebrity status was required from them because they were merely hired through petitioners personnel department just like any ordinary employee. The so-called talent fees of respondents correspond to wages given as a result of an employer-employee relationship. Respondent did not have the power to bargain for hue talent fees, a circumstance negating independent contractual relationship.

6.

In Sonza, the television station did not exercise control over the means and methods of the performance of Sonzas work. In the case at bar, ABC had control over the performance of petitioners work. Noteworthy too, is the comparatively low P28,000 monthly pay of petitioner vis the P300,000 a month salary of Sonza, that all the more bolsters the conclusion that petitioner was not in the same situation as Sonza.

7.

GR: A hospital is NOT liable for the negligence of an INDEPENDENT CONTRACTOR-PHYSICIAN.

EXCEPTION: If the physician is the OSTENSIBLE agent of the hospital also known as DOCTRINE OF APPARENT AUTHORITY - a hospital can be held vicariously liable for the negligent acts of a physician providing care at the hospital, regardless of whether the physician is an independent contractor, unless the patient know, or should have known, that the physician is an independent contractor. III. RIGHT TO HIRE

1.

The engagement of former employees with direct competitors may pose an unfair advantage to such competitors. Therefore, such condition in the contract prohibiting subsequent competitive employment is valid on the ground of its reasonableness and necessity.

16
2. A contract by which an employee agrees to refrain for a given length of time, after the expiration of the term of his employment, from engaging in a business, competitive with that of his employer, is not void as being in restraint of trade if the restraint imposed is not greater than that which is necessary to afford a reasonable protection.

3.

The prohibition against personal or marital relationships with employees of competitor companies upon Glaxos employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company.

4.

The questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. For failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative.

IV. WAGE AND WAGES RATIONALIZATION ACT

1.

Granting that meals and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the employer complying first with certain legal requirements. Without satisfying these requirements, the employer simply cannot deduct the value from the employee's wages. First, proof must be shown that such facilities are customarily furnished by the trade. Second, the provision of deductible facilities must be voluntarily accepted in writing by the employee. Finally, facilities must be charged at fair and reasonable value.

2.

Wage distortion presupposes an increase in the compensation of the lower ranks in an office hierarchy without a corresponding raise for higher-tiered employees in the same region of the country, resulting in the elimination or the severe diminution of the distinction between the two groups.

3.

The State has the right and duty to regulate the relations between labor and capital. These relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining agreements included, public policy, courts will not hesitate to strike down these stipulations. We find the point-of-hire classification by employed by respondent School to justify the distinction in the salary rates of foreign-hires and local-hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires.

4.

The Labor Code is clear that monthly-paid employees are not excluded from the benefits of holiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes monthly-paid employees from the said benefits by inserting, under Rule IV, Book III of the implementing rules, Section 2 which provides that monthly-paid employees are presumed to be paid for all days in the month whether worked or not. Thus, Section 2 cannot serve as basis of any right or claim. Absent any other legal basis, petitioners claim for wage differentials must fail. The basic rule in this jurisdiction is "no work, no pay." The right to be paid for un-worked days is generally limited to the ten legal holidays in a year.

5.

There are two ways of fixing the minimum wage: the "floor-wage" method and the "salaryceiling" method. The "floor-wage" method involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates. On the other hand, in the "salaryceiling" method, the wage adjustment was to be applied to employees receiving a certain denominated salary ceiling. In other words, workers already being paid more than the existing minimum wage (up to a certain amount stated in the Wage Order) are also to be given a wage increase.

17
V. WAGE ENFORCEMENT AND RECOVERY

1.

There is no doubt that the Regional Directors under RA 6715 can try money claims only if the following requisites concur: a) The claim is presented by an employee or person employed in domestic or household service, or househelper under the code; b) The claimant, no longer being employed, does not seek reinstatement; and c) The aggregate money claim of the employee or housekeeper does not exceed P5,000.

2.

We sustain the jurisdiction of the DOLE Regional Director. The visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor standard laws can be exercised even where the individual claim exceeds P5,000.00

VI. WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING WAGES

1.

A company practice favorable to the employees had indeed been established and the payments made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer.

2.

The court has consistently ruled that a bonus is not a demandable and enforceable obligation. It may nevertheless be granted on equitable considerations as when the giving of such bonus has been the companys long and regular practice. To be considered a regular practice, however, the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate.

3.

Petitioner has no legal authority to withhold respondents 13th month pay and other benefits. What an employee has worked for, his employer must pay. Thus, an employer cannot simply refuse to pay the wages or benefits of its employee because he has either defaulted in paying a loan guaranteed by his employer; or violated their memorandum of agreement; or failed to render an accounting of his employers property.

4.

To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself.

5.

For a bonus to be enforceable, it must have been promised by the employer and expressly agreed upon by the parties, or it must have had a fixed amount and had been a long and regular practice on the part of the employer.

6.

Management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and discipline, dismissal, and recall of workers.

VII. PAYMENT OF WAGES

1.

The petitioner was burdened to prove not only the existence of such benefits but also that he is entitled to the same, especially considering that such privileges are not inherent to the positions occupied by the petitioner in the respondent corporation, son-in-law of its president or not.

18
2. Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence. More so, in the case of supervisors or personnel occupying positions of responsibility, loss of trust justifies termination. Loss of confidence as a just cause for dismissal is premised on the fact that an employee concerned holds a position of trust and confidence. This situation applies where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employers property. But, in order to constitute a just cause for dismissal, the act complained of must be work-related, such that the employee concerned is unfit to continue working for the employer.

3.

The award of 13th month pay must be deleted. Respondent is not a rank-and-file employee and is, therefore, not entitled to thirteenth-month pay.

4.

Backwages in general are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal. It is not private compensation or damages but is awarded in furtherance and effectuation of the public objective of the Labor Code. Nor is it a redress of a private right but rather in the nature of a command to the employer to make public reparation for dismissing an employee either due to the formers unlawful act or bad faith. Article 279 mandates that an employees full backwages shall be inclusive of allowances and other benefits or their monetary equivalent.

VIII. CONDITIONS OF EMPLOYMENT

1.

Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. Thus, management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.

2.

The eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees must take their meals within the company premises. Employees are not prohibited from going out of the premises as long as they return to their posts on time. Private respondents act, therefore, of going home to take his dinner does not constitute abandonment.

3.

In Philippine Graphic Arts, Inc. v. NLRC, the Court upheld for the validity of the reduction of working hours, taking into consideration the following: the arrangement was temporary, it was a more humane solution instead of a retrenchment of personnel, there was notice and consultations with the workers and supervisors, a consensus were reached on how to deal with deteriorating economic conditions and it was sufficiently proven that the company was suffering from losses.

4.

In Odango v. National Labor Relations Commission, the Court ruled that the use of a divisor that was less than 365 days cannot make the employer automatically liable for underpayment of holiday pay. In said case, the employees were required to work only from Monday to Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days meant that the employees were deprived of their holiday pay for some or all of the ten legal holidays. The 304-day divisor used by the employer was clearly above the minimum of 287 days.

IX. MINIMUM LABOR STANDARD BENEFITS

19
1. It is well and good that petitioner was compensated for his overtime services. However, this does not translate into a right on the part of petitioner to demand additional payment when, under the law, petitioner is clearly exempted therefrom.

2.

Petitioner argues essentially that since the work of private respondent is performed away from its principal place of business, it has no way of verifying his actual hours of work on the vessel. It contends that private respondent and other fishermen in its employ should be classified as "field personnel" who have no statutory right to service incentive leave pay.In the case at bar, during the entire course of their fishing voyage, fishermen employed by petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural work away from petitioners business offices, the fact remains that throughout the duration of their work, they are under the effective control and supervision of petitioner through the vessels patron or master as the NLRC correctly held.

3.

Court held that petitioners are entitled to be paid for two regular holidays which fall on the same day even if they are daily-paid employees since the law does not distinguish between a daily paid and a monthly paid employee.

4.

At this point, it is necessary to stress that the definition of a field personnel is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employees performance is unsupervised by the employer.

5.

The Court disagrees with the NLRC's finding that petitioner was a managerial employee. However, petitioner was a member of the managerial staff, which also takes him out of the coverage of labor standards. Like managerial employees, officers and member of the managerial staff are not entitled to the provisions of law on labor standards.

X. OTHER SPECIAL BENEFITS

1.

There are three kinds of retirement schemes. The first type is compulsory and contributory in character. The second type is one set up by agreement between the employer and the employees in collective bargaining agreements or other agreements between them.The third type is one that is voluntarily given by the employer, expressly as in an announced company policy or impliedly as in a failure to contest the employee's claim for retirement benefits. It is this third type of retirement scheme which covers respondents Plan.

XI. RIGHT TO SECURITY OF TENURE

1.

However, with respect to the first two kinds of employees, the principal test for determining whether an employee is a project employee or a regular employee is whether or not the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee was engaged for that period.

2.

The repeated rehiring of respondent workers and the continuing need for their services clearly attest to the necessity or desirability of their services in the regular conduct of the business or trade of petitioner company.

3.

The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not

20
indispensability of that activity to the business of the employer. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. The law does not provide the qualification that the employee must first be issued a regular appointment or must be declared as such before he can acquire a regular employee status.

4.

Our computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the 6th month following. In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to "regularize" him on November 20, 1996.

5.

The petitioners were hired as "emergency workers" and assigned as chicken dressers, packers and helpers at the Cainta Processing Plant. The respondent GMC is a domestic corporation engaged in the production and sale of livestock and poultry, and is a distributor of dressed chicken. While the petitioners' employment as chicken dressers is necessary and desirable in the usual business of the respondent, they were employed on a mere temporary basis, since their employment was limited to a fixed period. As such, they cannot be said to be regular employees, but are merely "contractual employees." Consequently, there was no illegal dismissal when the petitioners' services were terminated by reason of the expiration of their contracts. Lack of notice of termination is of no consequence, because when the contract specifies the period of its duration, it terminates on the expiration of such period. A contract for employment for a definite period terminates by its own term at the end of such period.

6.

Each contract provided for an expiration date. Petitioners knew from the beginning that the employment offered to them was not permanent but only for a certain fixed period. They were free to accept or to refuse the offer. When they expressed their acceptance, they bound themselves to the contract. Simply put, petitioners were not regular employees. While their employment as mixers, packers and machine operators was necessary and desirable in the usual business of respondent company, they were employed temporarily only, during periods when there was heightened demand for production.

7.

Yet, this is not to say that part-time teachers may not have security of tenure. The school could not lawfully terminate a part-timer before the end of the agreed period without just cause. But once the period, semester, or term ends, there is no obligation on the part of the school to renew the contract of employment for the next period, semester, or term.

8.

We reiterate, however, that probationary employees enjoy security of tenure, but only within the period of probation.Likewise, an employee on probation can only be dismissed for just cause or when he fails to qualify as a regular employee in accordance with the reasonable standards made known by the employer at the time of his hiring.

9.

On the issue of illegal dismissal, we hold that petitioners failed to adhere to the "two-notice rule" which requires that workers to be dismissed must be furnished with: (1) a notice informing them of the particular acts for which they are being dismissed and (2) a notice advising them of the decision to terminate the employment.

10. Further, [the CA] is reminded of the jurisprudence that "the character of employment is determined not by stipulations in the contract, but by the nature of the work performed and that "an employee is regular because of the nature of the work and the length of service, not because of the mode or even the reason for hiring them." Thus, the scheme of PLDT in adopting the "Project Employment Agreement" where the [respondent] was made to sign and the design of referring [respondent] to an employment agency undoubtedly bolster its intention of stripping from [respondent] the privileges earned by the status of her [regular] employment.

21
11. As Brent pronounces, a fixed-term employment is valid only under certain circumstances, such as when the employee himself insists upon the period, or where the nature of the engagement is such that, without being seasonal or for a specific project, a definite date of termination is a sine qua non.

12. That petitioners themselves insisted on the one-year fixed-term is not even alleged by respondents. In fact, the sustained desire of each of the petitioners to enter into another employment contract upon the termination of the earlier ones clearly indicates their interest in continuing to work for SMC. Moreover, respondents have not established that the engagement of petitioners services, which is not in the nature of a project employment, required a definite date of termination as a sine qua non.

13. The fact that petitioners were constantly re-hired does not ipso facto establish that they became regular employees. Their respective contracts with respondent show that there were intervals in their employment. As ruled in Palomares v. National Labor Relations Commission, [18] it would be extremely burdensome for their employer to retain them as permanent employees and pay them wages even if there were no projects to work on.

XII. MANAGEMENT PREROGATIVE

1.

The Supreme Court ruled that an employee cannot be promoted, even if merely as a result of a transfer, without his consent. There is no law that compels an employee to accept a promotion for the reason that a promotion is in the nature of a gift or reward, which a person has a right to refuse.

2.

A transfer is a movement from one position to another of equivalent rank, level or salary, without break in the service. Promotion, on the other hand, is the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary. While it may be true that the right to transfer or reassign an employee is an employer's exclusive right and the prerogative of management, such right is not absolute. The right of an employer to freely select or discharge his employee is limited by the paramount police power for the relations between capital and labor are not merely contractual but impressed with public interest. And neither capital nor labor shall act oppressively against each other.

3.

Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. He adds that the reshuffling of employees was done in bad faith, because it was designed primarily to force him to resign.

4.

An employees right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.

5.

Since the finding of a bona fide occupational qualification justifies an employers no-spouse rule, the exception is interpreted strictly and narrowly. There must be a compelling business necessity for which no alternative exists other than the discriminatory practice. To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the employment qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis for believing that all or substantially all persons meeting

22
the qualification would be unable to properly perform the duties of the job.

6.

A post-retirement competitive employment restriction is designed to protect the employer against competition by former employees who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment. In case of failure to comply with the promise not to accept competitive employment within one year from February 28, 1995, respondent will have a cause of action against petitioner for protection in the courts of law.

XIII. TERMINATION OF EMPLOYMENT

1.

The SC held that illegally dismissed employees were entitled to full back wages that should not be diminished or reduced by the amount they had earned from another employment during the period of their illegal dismissal. While litigating, employees must still earn a living. Furthermore, as penalty for their illegal dismissal, their employers must pay them full back wages.

2.

The Supreme Court upheld in the very recent case of Agabon vs. NLRC the validity of the dismissal despite non-compliance with the notice requirement of the Labor Code. However, it required the employer to pay the dismissed employees the amount of P30,000.00, representing nominal damages for non-compliance with statutory due process.

3.

There are two grounds to legally terminate a probationary employee. It may be done either: a) for a just cause or b) when employee fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the start of the employment. Petitioners say that Agustin was terminated because he failed to qualify as a regular employee.

4.

The SC held that respondent Javiers absence from August 9, 1995 cannot be deemed as an abandonment of his work.Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain equivocal acts.

5.

The SC held that it would be best to award separation pay instead of reinstatement, in view of the strained relations between petitioner and respondents. In fact, while petitioner prayed for reinstatement, he also admitted that there is a strained relationship now prevailing between him and respondents. Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable.

XIV. SUSPENSION OF BUSINESS OPERATIONS

1.

The SC held that petitioner was constructively dismissed but not under Article 286. Contrary to the facts of this case, article 286 applies only when there is a bona fide suspension of the employer's operation of a business or undertaking for a period not exceeding six (6) months. In such a case, there is no termination of employment but only a temporary displacement of employees, albeit the displacement should not exceed six (6) months. The paramount consideration should be the dire exigency of the business of the employer that compels it to put some of its employees temporarily out of work.

XV. DISEASE AS GROUND FOR TERMINATION

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1. The rule is explicit. For a dismissal on the ground of disease to be considered valid, two requisites must concur: (a) the employee suffers from a disease which cannot be cured within six months and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, and (b) a certification to that effect must be issued by a competent public health authority.

2.

The employer, before it can legally dismiss its employee on the ground of disease, must adduce a certification from a competent public authority that the disease of which its employee is suffering is of such nature or at such a stage that it cannot be cured within a period of six months even with proper treatment.

XVI. OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION

1.

It should not be taken to mean that retirement provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and nullification. A CBA, as a labor contract, is not merely contractual in nature but impressed with public interest. If the retirement provisions in the CBA run contrary to law, public morals, or public policy, such provisions may very well be voided. Certainly, a CBA provision or employment contract that would allow management to subvert security of tenure and allow it to unilaterally retire employees after one month of service cannot be upheld. Neither will the Court sustain a retirement clause that entitles the retiring employee to benefits less than what is guaranteed under Article 287 of the Labor Code, pursuant to the provisions express proviso thereto in the provision.

2.

However, after reviewing the assailed decision together with the rules and regulations of respondents retirement plan, we find that the plan runs afoul of the constitutional guaranty of security of tenure contained in Article XIII, also known as the provision on Social Justice and Human Rights. A perusal of the rules and regulations of the plan shows that participation therein was not voluntary at all. Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age agrees to sever his or her employment with the former.

XVII. PRESCRIPTION OF CLAIMS

1.

The cause of action accrues until the party obligated refuses to comply with his duty. Being warded off by promises, the workers not having decided to assert their rights, their causes of action had not accrued. Since the parties had continued their negotiations even after the matter was raised before the Grievance Procedure and the voluntary arbitration, the respondents had not refused to comply with their duty.

2.

Article 291 covers all money claims from employer-employee relationship and is broader in scope than claims arising from a specific law. It is not limited to money claims recoverable under the Labor Code, but applies also to claims of overseas contract workers. Article 291 provides that all money claims arising from employer-employee relations shall be filed within three years from the time the cause of action accrued, otherwise, these shall be forever barred. A cause of action accrues upon the categorical denial of claim. Petitioners cause of action accrued only on January 6, 1998, when Avantgarde denied his claim and so breached its obligation to petitioner. Petitioner could not have a cause of action prior to this because his earlier requests were warded off by indefinite promises. The complaint filed on March 2, 2001 is beyond the three-year period mandated by the Labor Code.

3.

In illegal dismissal cases, the employee concerned is given a period of four years from the time of his dismissal within which to institute a complaint. This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be brought within four years. The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the worker. It is settled that in illegal dismissal

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cases, the cause of action accrues from the time the employment of the worker was unjustly terminated. Thus, the four-year prescriptive period shall be counted and computed from the date of the employees dismissal up to the date of the filing of complaint for unlawful termination of employment.

XVIII. JURISDICTION OF THE LABOR ARBITER

1.

The SC held that the NLRC and the labor arbiter had no jurisdiction over petitioners claim for damages, because that ruling was based on a quasi delict or tort per Article 2176 of the Civil Code. After carefully examining the complaint/position paper of petitioner, we are convinced that the allegations therein are in the nature of an action based on a quasidelict or tort.

2.

Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to include religious corporations, such as the SDA, in its coverage. Article 278 of the Labor Code on post-employment states that the provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. Obviously, the cited article does not make any exception in favor of a religious corporation.

3.

The SC held that the RTC has jurisdiction. Case law has it that the nature of an action and the subject matter thereof, as well as which court has jurisdiction over the same, are determined by the material allegations of the complaint and the reliefs prayed for in relation to the law involved. Not every controversy or money claim by an employee against the employer or viceversa is within the exclusive jurisdiction of the labor arbiter. A money claim by a worker against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter only if there is a reasonable causal connection between the claim asserted and employeeemployer relation. Absent such a link, the complaint will be cognizable by the regular courts of justice.

4.

The Labor Arbiter has jurisdiction over the case as the complaint alleges unfair labor practice which is one of those enumerated in Article 217 of the Labor Code (jurisdiction of Labor Arbiters).

5.

Where the employer-employee relationship is merely incidental and the cause of action proceeds from a different source of obligation, the Court has not hesitated to uphold the jurisdiction of the regular courts. Where the damages claimed for were based on tort, malicious prosecution, or breach of contract, as when the claimant seeks to recover a debt from a former employee or seeks liquidated damages in the enforcement of a prior employment contract, the jurisdiction of regular courts was upheld. The scenario that obtains in this case is obviously different. The allegations in private respondents complaint unmistakably relate to the manner of her alleged illegal dismissal.

DUE PROCESS a. Substantive - requires the intrinsic validity of the law in interfering with the rights of the person to life, liberty or property. In short, it is to determine whether it has a valid governmental objective like for the interest of the public as against mere particular class. b. Procedural due processone which hears before it condemns

PROCEDURAL DUE PROCESS requisites (in general) 1. There must be an IMPARTIAL AND COMPETENT COURT with judicial power to hear and determine the matter before it

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2. 3. 4.

Jurisdiction MUST HAVE BEEN LAWFULLY ACQUIRED over the person of the defendant or The defendant must be given an OPPORTUNITY TO BE HEARD Judgment must be RENDERED UPON LAWFUL HEARING5) NOTICE must be given

over the property subject of the proceeding

In criminal cases, requisites of procedural due process 1. 2. 3. 4. 5. 6. The accused must be heard by a court of COMPETENT JURISDICTION He must have been proceeded against under ORDERLY PROCESSES OF THE LAW He may be punished only after INQUIRY AND INVESTIGATION There must be NOTICE to the accused The accused must be given an OPPORTUNITY TO BE HEARD Judgment must be rendered WITHIN THE AUTHORITY of constitutional law

In dismissal cases before the NLRC, requirements To effectuate a valid dismissal from employment by the employer, the Labor Code has set twin requirements, namely: (A) the dismissal must be for any of the causes provided in Article 282 of the Labor Code; (SUBSTANTIVE) (B) the employee must be given an opportunity to be heard and defend himself. (PROCEDURAL) 1, notice (cardinal rule) (a) the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought; and (notice to explain) (b) the second notice informs the employee of the employers decision to dismiss him (notice of decision) 2. hearing

Banco Espanol vs Palanca JUDICIAL DUE PROCESS requisites: 1. There must be an impartial court or tribunal clothed with judicial power to hear and decide the

matter before it; 2. Jurisdiction must be lawfully acquired over the person of the defendant or over the property

subject of the proceedings; 3. 4. The defendant must be given the opportunity to be heard; Judgment must be rendered only after lawful hearing.

Guzman v. CA kicked out from school DUE PROCESS IN STUDENT DISCPLINE PROCEEDINGS requisites: 1) student must be informed in writing the nature and cause of the accusation against him; 2) right to answer the charges against them, with the assistance of counsel if desired;

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3) they shall be informed of the evidence against them; 4) right to adduce evidence in their own behalf; 5) evidence must be duly considered by the investigating committee or officials hearing the case Ang Tibay v. Court of Industrial Relations - DUE PROCESS IN ADMINISTRATIVE PROCEEDINGS requires compliance with the following cardinal principles: (1) the respondents right to a hearing, which includes the right to present ones case and submit supporting evidence, must be observed; (2) the tribunal must consider the evidence presented; (3) the decision must have some basis to support itself; (4) there must be substantial evidence; (5) the decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected; (6) in arriving at a decision, the tribunal must have acted on its own consideration of the law and the facts of the controversy and must not have simply accepted the views of a subordinate; and (7) the decision must be rendered in such manner that respondents would know the reasons for it and the various issues involved.