Reinstatement is the restoration of the

employee to the state from which he has

been unjustly removed or separated without
loss of seniority rights and other privileges.

BOOK SIX:
POST
TITLE ONE.
TERMINATION OF EMPLOYMENT
ART. 285 (formerly Art. 279)
In cases of regular employment, the
employer shall not terminate the services of
an employee except for just cause or when
authorized by this Title. An employee who is
unjustly dismissed from work shall be
entitled to reinstatement without loss of
seniority rights and other privileges and to
his full backwages, inclusive of allowances,
and to his other benefits of monetary
equivalent computed from the time of his
compensation was withheld from him up to
the time of his actual reinstatement.
SECURITY OF TENURE is the constitutional
right granted the employee, that the
employer shall not terminate the services of
an employee without just cause or when
authorized by law. It includes regular
(permanent) as well as not regular
(temporary) employment.
Note: Not every performance of services for
a fee creates an employer-employee
relationship. To hold that every person who
renders services to another for a fee is an
employee to give meaning to the security
of tenure clause will lead to absurd results.
Security of tenure clause is not
confined to cases of termination of employer
employee relationship alone. It is also
intended to shield workers from unwarranted
and unconsented demotion and transfer.
Consequences of the Violation of a
Workers Security of Tenure
1. Reinstatement without loss of seniority
rights and other privileges;
2. Full backwages inclusive of allowances
and other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him
up to the time of his actual
reinstatement; and
3. Recovery of moral and exemplary
damages and attorneys fees.

Forms of Reinstatement
1. Actual or Physical Reinstatement the
employee shall be admitted back to
work.
2. Payroll Reinstatement the employee
is merely reinstated in the payroll.
Effect of the Reversal of Labor Arbiters
Decision to the Reinstated Employee
When the decision of the Labor Arbiter
reinstating the employee was reversed in
appeal by the NLRC in Supreme Court ruled
that it is obligatory on the part of the
employer to reinstate the employee and pay
his wages during the period of appeal and
the decision of the Labor Arbiter was
reversed by the higher or highest court.
Further, the court ruled that the Labor
Arbiters
order
of
reinstatement
is
immediately executor and no writ of
execution is necessary to implement the said
order of reinstatement. (Garcia vs. Phil.
Airlines)
Court may order the reinstatement even
if the prayer of the complaint did not
include such relief
So long as there is a finding that the
employee was illegally dismissed, the court
can order the reinstatement of an employee
even if the complaint does not include a
prayer for reinstatement, unless, of course,
the employee has waived his right to
reinstatement. By law, an employee who is
unjustly
dismissed
is
entitled
to
reinstatement, among others. The mere fact
that the complaint did not pray for
reinstatement
will
not
prejudice
the
employee, because technicalities of law and
procedure are frowned upon in labor
proceedings.
Note: If there is an order of reinstatement
but the position is no longer available, the
employee should be given a substantially
equivalent position.
If no substantially
equivalent
position
is
available,
reinstatement should not be ordered

Page 1 of 8

because that would in effect compel the

employer to do the impossible. In such a
situation, the employee should merely be
given a separation pay consisting of one
month of salary for every year of service.

9. When employers business has closed

down.
Note: Under present laws and jurisprudence,
separation pay maybe viewed in four ways:

Doctrine of Strained Relations

Under the circumstances where the
employment relationship has become so
strained to preclude a harmonious working
relationship,
and
that
all
hopes
of
reconciliation are nil after reinstatement, it
would be more beneficial to accord the
employee backwages and separation pay.
Requisites
1. The employee concerned occupies a
position where he enjoys the trust and
confidence of his employer; and
2. If reinstated, an atmosphere of
antipathy and antagonism may be
generated as to adversely affect the
efficiency and productivity of the
employee concerned.
Even in cases of illegal dismissal, the
doctrine of strained relations is not applied
indiscriminately as to bar reinstatement,
especially when the employee has not
indicated an aversion to returning to work or
does not occupy a position of trust and
confidence in or has no say in the operation
of the employers business.
Separation Pay in Lieu of Reinstatement
Proceeds from an illegal dismissal wherein
reinstatement is ordered but cannot be
carried out as in the following cases:
1. Reinstatement cannot be effected in
view of the long passage of time or
because of the realities in the
situation;
2. That it would be inimical to the
employers interest;
3. Reinstatement may no longer be
feasible;
4. It will not serve the best interest of the
parties involved;
5. Company will be prejudiced by the
reinstatement;
6. It will not serve a prudent purpose;
7. That there is a resultant strained
relations;
8. When the former position of the
illegally dismissed employee no longer
exists; and

1. In lieu of reinstatement in illegal

dismissal cases, where the employee
is
ordered
reinstated
but
reinstatement is not feasible;
2. As employers statutory obligation in
cases of legal termination due to
authorized causes under Art. 289;
3. As financial assistance, as an act of
social justice and even in case of legal
dismissal under Art. 288;
4. As employment benefit granted in CBA
or company policy.
Note:
There are differences between a
reinstatement order pursuant to Article 229
and Article 285. The former provides for
reinstatement which is ordered by the Labor
Arbiter. Reinstatement pending appeal is selfexecutory. In the latter, it is regarded as a
relief to an employee whose dismissal is
declared illegal pursuant to a final and
executor judgment.
Reinstatement ordered by the Labor
Arbiter is self-executory; the one ordered by
the NLRC is not.
Moreover, in the former, the employer
has two (2) options: actual reinstatement or
payroll reinstatement. In the latter, there is
no such option.
Backwages is the relief given to an
employee to compensate him for lost
earnings during the period of his dismissal. It
presupposes illegal termination.
Note:
Entitlement to backwages of the
illegally dismissed employee flows from law.
Even of he does not ask for it, it may be
given. The failure to claim backwages in the
complaint for illegal dismissal is a mere
procedural lapse which cannot defeat a right
granted under substantive law.
How backwages is computed
It is computed from the time of the
illegal dismissal up to the time of actual
reinstatement. If reinstatement is no longer

Page 2 of 8

possible, it is computed until finality of the

decision.
Rule on Backwages
The backwages to be awarded should
not be diminished or reduced by earnings
elsewhere during the period of his illegal
dismissal. The reason is that the employee
while litigating the illegality of his dismissal
must still earn a living to support himself and
his family.
Inclusions in the Computation of
Backwages
1. Transportation
and
emergency
allowances;
2. Vacation or service incentive leave;
and
3. 13th month pay.
Note: Facilities such as uniforms, shoes,
helmets and ponchos should not be included
in the computation of backwages.
Reason: Such items are given free, to be
used only during official tour of duty not for
private or personal use.
Reinstatement v. Backwages
Reinstatement
Backwages
Restores
the Allows
the
same
employee who was employee to recover
unjustly dismissed to from the employer
the
position
from that which he had
which
he
was lost by way of wages
removed (i.e. to his as a result of his
status
quo
ante dismissal.
dismissal).
The award
of reinstatement is not
inconsistent with the award of backwages.
Separation Pay v. Backwages
Separation pay
Backwages
Separation pay is Backwages is paid for
paid
when the
compensation
reinstatement is no which otherwise the
longer possible.
employee
should
have earned had he
not been illegally
dismissed.
Computed on the Computed from the
basis
of
the time
of
illegal
employees length of dismissal up to actual
service/
reinstatement, or if
reinstatement is no
longer possible, until

Paid as a wherewithal
or assistance during
the period that an
employee is looking
for
another
employment.
Oriented towards the
future.
Separation
pay
cannot be paid in lieu
of backwages.

the finality of the

decision.
Paid for the loss of
earnings during the
period
between
illegal dismissal and
reinstatement.
Restoration of the
past income lost.
Payment
of
backwages is not
inconsistent
with
separation pay.

Monetary awards to illegally dismissed

OFWs
OFWs are not entitled to reliefs. This is so
because OFWs are contractual employees
whose rights and obligations are governed
primarily with the Rules and Regulations of
POEA.
OFWs who are terminated without just,
valid or authorized cause are entitled
to:
1. Full reimbursement of placement fee
and the deductions made with interest
at 12% per annum; and
2. Salaries for the unexpired portion of
the employment contract.
In case of conflicts arising between
employers management prerogative
and the employees right to security of
tenure, the latter takes precedence
Thus, an employers management
prerogative includes the right to terminate
the services of the employees but this
management prerogative is limited by the
Labor Code which provides that the employer
may terminate the employee only for a just
cause or authorized by law. This limitation is
because no less than the Constitution
recognizes and guarantees the employees
right to security of tenure.
ART. 286 (formerly Art. 280):
REGULAR AND CASUAL EMPLOYMENT
The provisions of written agreement to
the contrary notwithstanding and regardless
of the oral agreement of the parties, an
employment shall be deemed to be regular
where the employee has been engaged to
perform
activities
which
are
usually
necessary or desirable in the usual business

Page 3 of 8

or trade of the employer, except where the

employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at
the time of the engagement of the employee
or where the work or service to be performed
is seasonal in nature and the employment is
for the duration of the season.

the services rendered and its relation to the

general
scheme
under
which
the
business or trade, is
pursued
in
the
usual course.
ii.

An employment shall be deemed to be

casual if it is not covered by the preceding
paragraph: Provided, That any employee
who has rendered at least one year of
service, whether such service is continuous
or broken, shall be considered as regular
employee with respect to the activity in
whcich he is employed and his employment
shall continue while such activity exists.

iii.

2. Casual Employment where an

employee is engaged to perform
activities which are not necessary or
desirable in the usual trade or
business of the employer.
a. The status of regular employment
attaches to the casual employee
who has rendered at least one (1)
year of service, whether such
service is continuous or broken,
with respect to the activity on
which he is employed and his
employment shall continue while
such activity exists.
b. A casual employee is only casual
for one year and it is the passage
of time that gives him regular
status.

Four Kinds of Employees under Art. 286

(formerly ART. 280)
1. Regular employment;
2. Casual employment
3. Project employment; and
4. Seasonal employment.
1. Regular Employment
Employment arrangement where the
employee:
a. Has been engaged to perform
activities which are usually necessary
or desirable in the usual business or
trade of the employer;
b. Has rendered atleast one (1) year of
service, whether such service is
continuous or broken, with respect to
the activity in which he is employed;
or
c. When an employee is allowed to work
after a probationary period.

i.

Test of Regularity
Nature of Work Test whether or
not there is reasonable connection
between
particular
activity
performed by the employee in
relation to the usual business or
trade of the employer. If usually
necessary or desirable in the usual
business or trade of the employer,
the employment is deemed regular
employment.

Note: Whether the work undertaken

by the
employee
is
necessary
or
desirable can be
determined by looking at

Period of Service Test whether or

not the employee has rendered at
least one year, whether the same
is continuous or broken, shall be
considered regular employee.
Probationary Employment Test
whether or not the employee is
allowed to work after the lapse of
the probationary period shall be
considered a regular employee.

Purpose: To give meaning to the

constitutional
guarantees
of
security of tenure and right to selforganization.
3. Project Employment when the
employment has been fixed for a
specific project or undertaking, the
completion or termination of which
has been determined at the time of
engagement of the employee.
Where the employment of
project
employees is extended long
after the
supposed project has been
finished, the
employees are removed
from the scope of project employees and
considered regular employees.
When may a project employee become a
regular employee

Page 4 of 8

a. There is continuous rehiring of project

employees even after the cessation of
a project for the same tasks or nature
of tasks (the employee must be
continuously rehired without gaps and
intervals); and
b. The tasks performed by the alleged
project employee are vital, necessary
and indispensable to the usual
business or trade of the employer.

considered as indicators that an employee is

a project employee:
1. The duration of the specific/identified
undertaking for which the worker is
engaged is reasonably determinable;
2. Such duration, as well as the specific
work/service to be performed, is
defined in an employment agreement
and is made clear to the employee at
the time of hiring;
3. The work/service performed by the
employee is in connection with the
particular
project/undertaking
for
which he is engaged;
4. The employee, while not employed
and awaiting engagement, is free to
offer his services to any other
employer;
5. The termination of his employment in
the particular project/undertaking is
reported to the DOLE Regional Office
having jurisdiction over the workplace
within thirty (30) days following the
date of his separation from work using
the prescribed form on employees
terminations/ dismissals/ suspensions;
6. An undertaking in the employment
contract by the employer to pay
completion bonus to the project
employee as practiced by most
construction companies.

Note: Project has reference to a particular

job or undertaking that may or may not be
within
the regular or usual business of
employer. In either ease, the project must be
distinct, separate, and identifiable from the
main business of the employer and its
duration
must
be
determined
or
determinable.
Members of a work pool from which a
construction company draws its project
employees, if considered employees of the
construction company while in the work pool,
are not project employees or employees for
an indefinite period. If they are employed in
a particular project, the completion of the
project or any phase thereof will not mean
severance of Er-Ee relationship.
Unless, the workers in the work pool are free
to leave anytime and offer their services to
other employers.
Note: Project employees are not regular
employees, their services being needed only
when there are projects to be undertaken.
Requirements
1. Specific project phase thereof stated
in the employment contract;
2. Estimated date of completion of
project or phase thereof likewise
stated in the contract;
3. Employee must have been dismissed
every after completion of his project or
phase (gaps must be shown in his
length of service); and
4. There must be a report to the DOLE of
his dismissal on account of completion
of contract.
Indicators of Project Employment
Either one or more of the following
circumstances, among others, may be

Principal Test to Determine Whether

Employees Are Project Employees As
Distinguished From Regular Employees
Whether or not the project employees
are assigned to carry out a specific project or
undertaking the duration or scope of which
are specified at the time the employees are
done for that project.
Entitlement to Separation Pay
General Rule: Project employees are not
entitled to separation pay if they are
terminated as a result of the completion of
the project or a phase thereof in which they
have been employed.
Exception: if the projects they are working
on have not yet been completed when their
service are terminated; project employees
also enjoy security of tenure during the
limited time of their employment.

Page 5 of 8

Note: If the termination is brought about by

the completion of the contract or phase
thereof, no prior notice is required; employer
is under the law, only obliged to render
report to the DOLE on the termination of the
employment.
4.
Seasonal
Employment
is
an
employment
arrangement
where
an
employee is engaged to work during a
particular season on an activity that is
usually necessary or desirable in the usual
business or trade of the employer.
During off-season, the relationship of
employer and employee is not severed; the
seasonal employee is merely considered on
leave of absence without pay.
When
are
Seasonal
Employees
Considered as Regular Employees
1. When there is reasonable connection
between
the
particular
activity
performed by the employee relation to
the usual trade or business of the
employer; and
2. Seasonal workers who are repeatedly
engaged to perform the same tasks
for more than one season.
Note: One year duration on the job is
pertinent in deciding whether a casual
employee has become regular or not, but it
is not pertinent to a seasonal or project
employee. Passage of time does not make a
seasonal worker regular or permanent.
When the business establishment is
sold which effectively terminates the
employment of the seasonal employees, the
latter would be entitled to separation pay.
Other forms of employment under Book
VI
1. Fixed Period Employment; and
2. Probationary
Temporary or Fixed-Period Employment
is an employment arrangement where an
employee is engaged to work on a specific
project or undertaking which is usually
necessary or desirable in the usual business
or trade of the employer, the completion of
which has been determined at the time of
the engagement of the employee.

A fixed-period employee does not

become a regular employee because his
employment is co-terminus with a specific
period of time.
Reason for validity of fixed-period
employment:
Freedom of parties to contract so long
as the stipulations thereof are not contrary to
law, morals, good customs, public order and
public policy.
Note: It does not necessarily follow that
where the duties of the employee consist of
activities usually necessary or desirable in
the usual business of the employer, the
parties are forbidden from agreeing on a
period of time for the performance of such
activities. There is nothing contradictory
between a definite period of employment
and the nature of the employees duties.
However, in the following cases, workers
employed for a fixed-term were considered
as regular employees:
1. The employees were allowed to work
beyond the fixed-term without the
benefit of a new contract;
2. The employees were allowed to work
for more than one year and there is a
reasonable connection between the
particular activity performed by the
employees in relation to the usual
business or trade of the employer;and
3. In case of successive renewals of fixed
period contracts and there is a
reasonable connection between the
particular activity performed by the
trade of the employer.
Criteria under which Fixed Period
Employment may be Valid
1. 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
averring his consent; or
2. It satisfactorily appears that the
employer and the employee dealt with
each other on more or less equal
terms with no moral dominance
exercised by the former or the latter.

Page 6 of 8

General Rule: Fixed-Period Employment is

valid so long as the criteria are complied
with.
Exception: While the Supreme Court has
upheld
the
legality
of
fixed-term
employment, where from the circumstances
it is apparent that the periods have been
imposed to preclude acquisition of security of
tenure by the employee, they should be
struck down or disregarded as contrary to
public policy.
Special Groups of Employees
1. OFWs and Seafarers cannot be
considered as regular employees.
Their employment is governed by the
contracts they sign every time they
are rehired and their employment is
terminated when the contract expires.
Their employment is fixed for a certain
period of time.
2. For a private school teacher to acquire
permanent status in employment, the
following requisites must concur: (1)
the teacher is a full-time teacher; (2)
the teacher must have rendered three
consecutive years of service; and (3)
such
service
must
have
been
satisfactory.
3. Piece-rate
workers
may
attain
regularity of employment. Payment by
the piece is just a method of
compensation and does not define the
essence of compensation. For piece
rate workers to be regularized: (1)
their work must be necessary or
desirable in the usual business of the
employer; (2) they worked for the
employer throughout the year, their
employment not being dependent on a
specific project or season, and as they
worked for more than one year.

ART.
287
(formerly
Art.
281):
PROBATIONARY EMPLOYMENT
Probationary employment shall not
exceed six (6) months from the date the
employee started working, unless it is
covered
by
apprenticeship
agreement
stipulating a longer period. The services of
an employee who has been engaged in a
probationary basis may be terminated for a
just cause or when he fails to qualify as a
regular employee in accordance with

reasonable standards made known by the

employer to the employee at the time of his
engagement. An employee who is allowed to
work after a probationary period shall be
considered a regular employee.
Probationary Employment exists where
the employee upon his engagement is made
to undergo a trial period during which the
employer determines his fitness to qualify for
regular employment based on reasonable
standards made known to him by the
employer at the time of his engagement.
Note:
In
all
cases
of
probationary
employment, the employer shall make
known to the employee the standards under
which he will qualify as a regular employee
at the time of his engagement. Where no
standards are made known to the employee
at that time, he should be regarded as a
regular employee.
Characteristics
of
Probationary
Employment
1. It is an employment for a trial period;
2. It is a temporary employment status
prior to regular employment; and
3. It arises through a contract with the
following elements:
a. The employee must learn and work
at a particular type of work;
b. Such work calls for a certain
qualifications;
c. The probation is fixed;
d. The employer reserves the power
to terminate during or at the end of
the trial period; and
e. If the employee learns the job at
the satisfaction of the employer, he
becomes a regular employee.
Duration
General Rule: Probationary employment
shall not exceed six (6) months from the date
the employee started working.
The computation of the 6-month period is
reckoned from the date of appointment up to
the same calendar date of the 6 th month
following.
Exceptions:
1. When
it
is
covered
by
an
apprenticeship agreement stipulating
a longer period;

Page 7 of 8

2. When the parties to an employment

contract agree otherwise;
3. When the same is established by
company policy; and
4. When the same is required by the
nature of the work performed by the
employee.
Example: the probationary period set for
professors, instructors, and teachers is three
(3) consecutive years of satisfactory service
pursuant to DOLE. Manual of Regulations for
Public Schools.
Extension of Probation
The employer and employee may extend by
agreement
the
probation
period
of
employment beyond six (6) months.
Note: By voluntarily agreeing to such
agreement, the employee waived any benefit
attached to the completion of the period if he
still failed to pass the grade during the
period of extension.
Double or Successive Probation not
Allowed
The evil sought to be prevented is to
discourage the scheming employers from
using the system of double or successive
probation to circumvent the mandate of the
law on regularization and make it easier for
them to dismiss their employees.
Termination
of
Probationary
Employment
Probationary employees are protected by the
security of tenure provision of the
Constitution. However, a probationary
employee may be terminated at any time
before the expiration of the probationary
period on two (2) grounds:
1. Just cause; and
2. Failure to meet the standards for
qualifications
for
a
regular
employment.
Note: the probationary employee is entitled
to procedural due process prior to
dismissal from the service.

However, unlike the first ground for the

valid
termination
of
probationary
employment which is for just cause, the
second ground does not require notice and
hearing. Due process of law for this second
ground consists of making reasonable
standards expected of the employee during
his probationary period known to him at the
time of his probationary employment.
The power of the employer to terminate
probationary employees is subject to the
following limitations:
1. This power must be exercised in
accordance
with
the
specific
requirements of the contract;
2. The dissatisfaction on the part of the
employer must be real and in good
faith, not feigned so as to circumvent
the contract or the law; and
3. There
must
be
no
unlawful
discrimination in the dismissal.
Limitations to Termination of Probation
1. The employers power to terminate a
probationary employment contract
must be exercised in accordance with
the specific requirements of the
contract;
2. If a particular time is prescribed, the
termination must be within such time
and if formal notice is required, then
that form must be used;
3. The employers dissatisfaction must
be real and in good faith, not feigned
so as to circumvent the contract or the
law; and
4. There
must
be
no
unlawful
discrimination in the dismissal.
Regular
Status
after
Probationary
Period
If the probationary employee id allowed to
work beyond the period of six months or the
agreed probationary period, said employee
becomes a regular employee by operation of
law.

Page 8 of 8