CONSEQUENCES OF TERMINATION
6, 1992
Separation Pay Four Context
Separation Pay for Authorized Causes under Arts. 283-284
by serving a written notice on the workers and the Ministry of Labor
and Employment at least one (1) month before the intended date
thereof.
In case of termination due to the installation of labor-saving
devices or redundancy, the worker affected thereby shall be entitled
to a separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher.
In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall
be equivalent to one (1) month pay or at least one-half (1/2) month pay
for every year of service, whichever is higher.
A fraction of at least six (6) months shall be considered one (1) whole
year.
ART. 299. [284] Disease as Ground for Termination. An employer may
terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the
health of his co-employees: Provided, That he is paid separation pay
equivalent to at least one (1) month salary or to one-half (1/2) month
salary for every year of service, whichever is greater, a fraction of at
least six (6) months being considered as one (1) whole year.
Separation Pay as Financial Assistance in Legal Dismissal under
Art. 282
ART. 282. [267] Assistance by the Department of Labor. The
Department of Labor, at the initiative of the Secretary of Labor, shall
extend special assistance to the organization, for purposes of
collective bargaining, of the most underprivileged workers who, for
reasons of occupation, organizational structure or insufficient incomes,
are not normally covered by major labor organizations or federations.
Separation Pay in lieu of Reinstatement
1. In lieu of reinstatement in illegal dismissal cases, where
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. 283 and 284 of the LC.
3. As financial assistance, as an act of social justice and even in
case of legal dismissal under Art. 282 of the LC.
4. As employment benefit granted in CBA or company policy.
Separation Pay as an Employment Benefit
Backwages
It is the relief given to an employee to compensate him for the lost
earnings during the period of his dismissal. It presupposes illegal
termination.
Distinguish from Separation Pay
Full Backwages
Mercury Drug Rule (Prior to R.A. 6715)
Mercury Drug vs. CIR 56 SCRA 694
Rule after R.A. 6715 (Date to Reckon March 21, 1989)
Alex Ferrer vs. NLRC July 5, 1993
Pines City vs. NLRC Nov. 10, 1993
Pines City Ruling Abandoned
Bustamante vs. NLRC Nov. 28, 1996
No Retroactivity
Maranaw Hotel vs. CA, Nov.
Reinstatement
It 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.
Reinstatement without Backwages
1.) Reinstatement cannot be effected in view of the long
passage of time or because of the realities of the situation.
2.) It would be inimical to the employers interest. When
reinstatement is no longer feasible.
3.) When it will not serve the best interest of the parties
involved.
4.) Company will be prejudiced by reinstatement.
5.) When it will not serve a prudent purpose.
6.) When there is resultant strained relation (applies to both
confidential and managerial employees (Ees) only).
7.) When the position has been abolished (applies to both
managerial, supervisory and rankandfile Ees).
Reinstatement not feasible; Separation pay in lieu of
reinstatement
How Much?
Strained Relationship Bar to Reinstatement
When the Employer can no longer trust the Ee and vice versa, or there
were imputations of bad faith to each other, reinstatement could not
effectively serve as a remedy. This doctrine applies only to positions
which require trust and confidence.
Damages
Moral Damages
Exemplary Damages
Indemnity
See Wenphil, Serrano, Agabon and Jaka above
Attorneys Fees
Art. 285 Termination by Employee
a) An employee may terminate without just cause the employee-
employer relationship by serving a written notice on the employer at
least one (1) month in advance. The employer upon whom no such
notice was served may hold the employee liable for damages.
(b) An employee may put an end to the relationship without serving any
notice on the employer for any of the following just causes:
1. Serious insult by the employer or his representative on the honor
and person
of the employee;
2. Inhuman and unbearable treatment accorded the employee by the
employer or his representative;
3. Commission of a crime or offense by the employer or his
representative against the person of the employee or any of the
immediate members of his family; and
4. Other causes analogous to any of the foregoing.

Resignation and Resignation Notice

Resignation Pay

Constructive Dismissal; Forced Resignation

An involuntary resignation resorted to when:

1. continued employment becomes impossible, unreasonable, or

unlikely
2. there is a demotion in rank or diminution in pay or
3. clear discrimination, insensibility or disdain by an Employer
becomes unbearable to the Employee.

Art. 286 When Employment not Deemed Terminated

Suspension of Operations; Floating Status

Sentinel Security Agency vs. NLRC, Sept. 3, 1998

Prolonged Floating Status may Amount to Constructive Dismissal

Agro Commercial Security Services vs. NLRC, July 31, 1989

Book VI Title II RETIREMENT FROM THE SERVICE

Art. 287 Retirement

Retirement defined

ART. 302. [287] Retirement. Any employee may be retired upon

reaching the retirement age established in the collective bargaining
agreement or other applicable employment contract.
In case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and
any collective bargaining agreement and other agreements: Provided,
however, retirement benefits under any collective bargaining and other
agreements shall not be less than those provided therein.

It is the result of a bilateral act of the parties, a voluntary agreement

between the employer and the employees whereby the latter after
reaching a certain age agrees and/or consents to sever his
employment with the former.

Kinds of Retirement

1. Compulsory and contributory in nature;

2. One set up by the agreement between the employer and

employees in the CBA or other agreements between them (other
applicable employment contract);

3. One that is voluntarily given by the Er, expressly as announced

company policy or impliedly as in the failure to contest the Ees
claim for retirement benefits.

R.A.7641 given Retroactive Effect; Conditions for Retroactive

Application

1.) The claimant for retirement benefits was still the employee of
the employer at the time the statute took effect; and

2.) The claimant was in compliance with the requisites for

eligibility under the statute for such retirement benefits