ILLEGAL DISMISSAL Ramil F. De Jesus Introduction Ones job is ones property.

If a person will be deprived of his job it is equivalent to deprivation of property which the Constitution amply protects. The Bill of Rights of the Constitution provides:
No person shall be deprived of life, liberty or property without due process.

The Labor Code of the Philippines however, provides for circumstances when an employee may be dismissed from the service: (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 representativesany immediate member of his family or his duly authorized; and (e) Other causes analogous to the foregoing. There are other authorixzed causes where an employer may validly terminatiesan employees. They are [provided in Art. 283 of the Labor Code, itr states: Under Article 283 of the Labor Code, the employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of

termination due to the installation of laborsaving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. When the termination effected is not in accordance with the above provisions then the termination is illegal and the dismissed employee shall be reinstated with full backwageswithout loss of seniority ranks. In some circumstances, even if the termination of services is in accordance with the above mentioned provisions when the termination, the termination may be considered as illegal and may subject the employer to payment of damages. Illegal dismissal amounts to deprivation of property, a right which is fully and amply protected by the Constitution. The contribution of Labor in the development of the country is equally respected by the Constitution as it provides: Objectives: 1. To provide an overview on the topic of illegal dismissal 2. To discuss the effect of illegal dismissal. Discussion Termination by employer means the act of dismissing an employee in a manner provided in the Labor Code. Any other means of dismissing an employee and in accordance with the Labor Code is illegal dismissal. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work

One of the just causes enumerated in the Labor Code is serious misconduct. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. Such misconduct, however serious, must nevertheless be in connection with the employee's work to constitute just cause for his separation. Thus, for misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the performance of the employees duties; and (c) it must show that the employee has become unfit to continue working for the employer.( G.R. No. 164181). In this case, the Court found the language of the letter explanation of an employee to constitute improper or wrong conduct that warrants dismissal, it ruled:
Going through the records, this Court found evidence to support the allegation of serious misconduct or insubordination. Petitioner claims that the language used by respondent in his Letter-Explanation is akin to a manifest refusal to cooperate with company officers, and resorted to conduct which smacks of outright disrespect and willful defiance of authority or insubordination. The misconduct to be serious within the meaning of the Labor Code must be of such a grave and aggravated character and not merely trivial or unimportant.[20] The LetterExplanation[21] partly reads:
Again, it's not negligence on my part and I'm not alone to be blamed. It's negligence on your part [Perla Go] and A.A. Del Rosario kasi, noong pang April 1999 ay alamninyonahindiakoangdapat may responsibilidad ng payroll kundiang Section Head eh bakithindininyopinahawaksa Section Head noon pa. Patikamingdalawasa payroll, kasamakosi Thelma. Tinanggalnyosi Thelma. Hindi nyobanaisipnakailangandalawaangtaosa payroll parapag absent angisa ay may gagawa. Dapat noon nyo pa naisipiyan.Angtagalkonggumawa ng trabahonghindikonamandapatginagawa.

This Court finds the above to be grossly discourteous in content and tenor. The most appropriate thing he could have done was simply to state his facts without resorting to such strong language. Past decisions of this Court have been one in ruling that accusatory and inflammatory language used by an employee to the employer or superior can be a ground for dismissal or termination.(Nissan Motor Phils. V. Angelo, G. R. No. 164181) Gross habitual neglect of duty

4 The Supreme Court in ruling the case of ____G.R. No. 109390, defined: Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. On the other hand, fraud and willful neglect of duties imply bad faith on the part of the employee in failing to perform his job to the detriment of the employer and the latter's business. To dismiss an employee on the gropund of gross habitual neglect of duty Art. 282 provides that an employer may terminate an employee for "gross and habitual neglect by the employee of his duties" and for "fraud." In both instances, substantial evidence is necessary for an employer to effectuate any dismissal. Uncorroborated assertions and accusations by the employer do not suffice, otherwise the constitutional guaranty of security of tenure of the employee would be jeopardized. Article 282 (b) imposes a

stringent condition before an employer may terminate an employment due to gross and habitual neglect by the employee of his duties. To sustain a termination of employment based on this provision of law, the negligence must not only be gross but also habitual. (G.R. No. 180123) The dismissal anchored on this cause is very stringent. In G.R. 152166, the Court stated that under Article 282 (b) of the Labor Code, an employer may terminate an employee for gross and habitual neglect of duties. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of ones duties. Habitual neglect implies repeated failure to perform ones duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. It finds that: Under the prevailing circumstances, respondent exercised his best judgment in monitoring the CCTV cameras so as to ensure the security within the hospital premises. Verily, assuming arguendo that respondent was negligent, although this Court finds otherwise, the lapse or inaction could only be regarded as a single or isolated act of negligence that cannot be categorized as habitual and, hence, not a just cause for his dismissal. Petitioners anchor on the postulate that even a single or isolated act of negligence by respondent constitutes a just cause for his dismissal as it engendered the possibility of a legal action that may be taken against them by the owner of the lost items. This is purely speculative. The Certification,22 dated July 8, 1999, issued by Renato PolitudValebia, Police

5 Superintendent, Station Commander of Galas Police Station (Station II), located at UnangHakbang Street, corner Luzon Avenue, Galas, Quezon City, stated that no incident of theft was reported by the management of petitioner hospital or any of its authorized representatives involving the loss of the plane tickets and other personal belongings of Justin Tibon and Andanie De Brum. Even the supposed complainant, Tibon, did not institute any complaint against petitioner hospital. Therefore, it cannot be said that petitioners incurred actual loss or pecuniary damage. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; In dismissing the claim of an employee that his position I not of trust and confidence and so his dismissal from the service is illegal, the Court ruled that: The dismissal is also justified as the act imputed upon the petitioner qualifies as fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative under Article 282 (c) of the Labor Code. While the petitioner contests this ground by denying that his position is one of trust and confidence, it is undisputed that at the time of his dismissal, he was holding a supervisory position after he rose from the ranks since commencement of his employment with Meralco. As a supervisor with duty and power that included testing of service meters and investigation of violations of contract of customers, his position can be treated as one of trust and confidence, requiring a high degree of honesty as compared with ordinary rank-and-file employees. This Court declared in The CocaCola Export Corporation v. Gacayan:24 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 termination of employment is premised from the fact that an employee concerned holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employer's property. But, in order to constitute a just cause for dismissal, the act complained of must be work-related such as would show the employee concerned to be unfit to continue working for the employer.25 (citations omitted) In this case, the acts complained of were clearly work-related because they related to matters the petitioner handled as branch field representative. Taking into account the results of its investigations, Meralco cannot be expected to trust Yabut to properly perform his functions and to meet the demands of his job. His dishonesty, involvement in theft and tampering of electric meters clearly prejudice respondent Meralco, since he failed to perform the duties which he was expected to perform.(G.R. No. 190436).

6 Article 282(c) of the Labor Code prescribes two separate and distinct grounds for termination of employment, namely: (1) fraud; or (2) willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence.[Etcuban, Jr. v. Sulpicio Lines, Inc., 489 Phil. 483, 496 (2005).] As provided for in Article 282, an employer may terminate an employees employment for fraud or willful breach of trust reposed in him. But, in order to constitute a just cause for dismissal, the act complained of must be work-related such as would show the employee concerned to be unfit to continue working for the employer.[G.R. No. 169564 citing CA rollo p3-0, penned by Associate Justice Delilah Vidallon-Magtolis and concurred in by Associate Justices Arturo D. Brion (now Member of this Court) and Jose C. Reyes, Jr.).

In another case of dismissal of employee because of loss of trust and confidence the Court ruled: The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and confidence. In this case, there is no doubt that James held a position of trust and confidence as Assistant Vice-President of the Jewelry Department. The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary.[Abel v. Philex Mining Corporation, G.R. No. 178976, July 31, 2009, 594 SCRA 683, 694.] Commission of a crime or offense by the employee against the person of his employer or representatives any immediate member of his family or his duly authorized In Starlite Plastic Industrial Corp. v. NLRC, the Court ruled that: Thus as correctly found by the Labor Arbiter, the mauling incident by itself was a valid ground to terminate complainants services considering that the victim was a manager and therefore a duly authorized representative of respondents. It does not matter later on that the case was settled by the execution of an affidavit of desistance because conviction of an employee in a criminal case is not indispensable to warrant his dismissal by his employer and that the fact that a criminal complaint against the employee has been dropped by the City Fiscal is not binding and

7 conclusive upon a labor tribunal. (Starlite Plastic Industrial Corp. vs. NLRC, 171 SCRA 315) Authorize cause The Labor Code provides in Art. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. The employer may also terminate the employment of any employee due to the installation of laborsaving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title by serving a written notice on the worker and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to separation pay equivalent to at least his one (1) month pay or at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1) whole year.

However to prevent the abuse of some employers of this provision, the Lagor Code also provides for a more stringent rule for thiusauthiowrize cause for termination. In Lopez Sugar Corporation v. Federation of Free Workers,[11] this Court had the opportunity to lay down the following standards that a company must meet to justify retrenchment to prevent abuse by employers: Firstly, the losses expected should be substantial and not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bona fide nature of retrenchment would appear to be seriously in question. Secondly, the substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. There should, in other words, be a certain degree of urgency for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees retired or otherwise laid-off. Because of the consequential nature of retrenchment, it must, thirdly, be reasonably necessary and likely to effectively prevent the expected losses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other costs other than labor costs. An employer who, for instance, lays off substantial numbers of workers while continuing to dispense fat executive bonuses and perquisites or so-called golden parachutes, can scarcely claim to be retrenching in good faith to avoid losses. To impart operational meaning to the constitutional policy of providing full protection to labor, the employers prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of

8 last resort, after less drastic means e.g., reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of marketing and advertising costs, etc. have been tried and found wanting.

Lastly, but certainly not the least important, alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees.

Effect of Illegal Dismissal

The Labor Code requires a valid cause to terminate an employee. If there is no valid cause, there is no valid termination and the employer will be held liable for illegal dismissal. If the cause of dismissal falls under any of the five circumstances of Article 282, no separation pay shall be given to the dismissed employee. In dismissal cases falling under Article 283, separation pay shall only be required if the dismissal is due to the installation of labor-saving devices or redundancy. In these two cases, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher.

If the dismissal is due to retrenchment to prevent losses or closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. In all cases, a fraction of at least six (6) months shall be considered one (1) whole year.

On the other hand if the dismissal is due to retrenchment to prevent losses or closures or cessation of operations of establishment or undertaking due to serious business losses or financial reverses no separation pay shall be given to the dismissed employee.(http://www.abogadomo.com/law-professor/law-professor-archives/points-toremember-in-dismissal-cases)

9 In some cases where there exist a valid authorized cause for dismissal the dismissed employee may be awarded damage for failure on the part of the employer to follow the procedures below, to wit; a. Notice The employer shall furnish the workers a written notice stating the particular acts or omissions constituting the grounds for his dismissal. In cases of

abandonment of work, the notice shall be served at the workers last known address. b. Answer The worker may answer the allegations stated against him in the notice within a reasonable period. c. Hearing The employer shall afford the worker ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires. d. Notice of decision The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the reasons therefor. e. Report on dismissal The employer shall submit a monthly report to the regional Office having jurisdiction over the place of work, all dismissals effected by him during the month, specifying therein the names of the dismissed workers, the reasons for their dismissal, the dates of commencement and termination of employment, the positions last held by them and such other information as may be required by the Department of labor for policy guidance and statistical purposes. In one case the where an employees dismissal was found to be based on just cause but the procedural due process was not observed the Court ruled: In an unlawful dismissal case, the employer has the burden of proving the lawful cause sustaining the dismissal of the employee. The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. Dys behavior constituted just cause. However, petitioners cannot deny that they failed to observe due process. The law requires that the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employers decision to dismiss him. Failure to comply with the requirements taints the dismissal with illegality. Petitioners should thus indemnify Dy for their failure to observe the requirements of due process. Dy is not entitled to reinstatement, backwages and attorneys fees because Dys dismissal is for just cause but without due process. In light of this Courts ruling in Agabon v. National Labor Relations Commission, the violation of Dys right to statutory due process by petitioners, even if the dismissal was for a just

10 cause, warrants the payment of indemnity in the form of nominal damages. This indemnity is intended not to penalize the employer but to vindicate or recognize the employees right to statutory due process which was violated by the employer.Considering that both the Labor Arbiter and the NLRC found that petitioners already gave Dy P120,000 of their own free will, this amount should thus constitute the nominal damages due to Dy.(G.R. No. 173231). Conclusion An employer is the owner of the business. As such he is vested with prerogatives on how to run his business. But this prerogative is not absolute. It has to follow and observe the constitutional and statutory limitations to protect the rights of his employees as well as promote social justice.