labrel doctrines

8/10/2019 Labrel Doctrines

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Case Doctrines in Labor Relations

Kiok Loy v. NLRC Collective bargaining, which is defned as negotiations towards acollective agreement, is one o the democratic rameworks under theNew Labor Code, designed to stabilize the relation between labor andmanagement and to create a climate o sound and stable industrialpeace !t is a mutual responsibilit" o the emplo"er and the #nion andis characterized as a legal obligation $o much so that %rticle &'(, par

)g* o the Labor Code makes it an unair labor practice or an emplo"erto reuse +to meet and convene promptl" and epeditiousl" in goodaith or the purpose o negotiating an agreement with respect towages, hours o work, and all other terms and conditions oemplo"ment including proposals or ad-usting an" grievance or.uestion arising under such an agreement and eecuting a contractincorporating such agreement, i re.uested b" either part"

/hile it is a mutual obligation o the parties to bargain, theemplo"er, however, is not under an" legal dut" to initiate contractnegotiation 0he mechanics o collective bargaining is set in motiononl" when the ollowing -urisdictional preconditions are present,namel", )1* possession o the status o ma-orit" representation o theemplo"ees2 representative in accordance with an" o the means oselection or designation provided or b" the Labor Code3 )&* proo oma-orit" representation3 and )4* a demand to bargain under %rticle&51, par )a* o the Labor Code

% Compan"2s reusal to make counter proposal i considered inrelation to the entire bargaining process, ma" indicate bad aith andthis is speciall" true where the #nion2s re.uest or a counter proposalis let unanswered

Unfair labor practice is committed when it is shown that theemplo"er, ater having been served with a written bargaining proposalb" the petitioning #nion, did not even bother to submit an answer orrepl" to the said proposal

St. Martin Funeral Home v. NLRC 6ver since appeals rom the NLRC to the $upreme Court wereeliminated, the legislative intendment was that the special civil actiono certiorari was and still is the proper vehicle or -udicial review odecisions o the NLRC 0he use o the word +appeal7 in relation theretocould have been a lapsus plumaebecause appeals b" certiorari andthe original action or certiorari are both modes o -udicial reviewaddressed to the appellate courts 0he important distinction betweenthem, however, is that the special civil action o certiorari is within theconcurrent original -urisdiction o the $upreme Court and the Court o%ppeals3 whereas to indulge in the assumption that appeals b"

certiorari to the $upreme Court are allowed would not subserve, butwould subvert, the intention o Congress

General Milling Corp. v. C 0he relation between labor and management should be undisturbeduntil the last 89 da"s o the fth "ear

:or reusing to send a counter;proposal to the union and to bargainanew on the economic terms o the C


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the Civil Code which provides? +)!*n case o doubt, all labor legislationand all labor contracts shall be construed in avor o the saet" anddecent living or the laborer7

0he terms and conditions o a collective bargaining contractconstitute the law between the parties 0hose who are entitled to itsbenefts can invoke its provisions !n the event that an obligation

therein imposed is not ulflled, the aggrieved part" has the right to goto court or redress

% wage increase granted b" an emplo"er to its emplo"ees under theC


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their rights 0hus, even beore %rticle &11 o the labor Code )BD ''&*was amended b" Republic %ct No 8>15, it was alread" declared apolic" o the $tate, +)d* 0o promote the enlightenment o workersconcerning their rights and obligations as emplo"ees7 0his was, ocourse, amplifed b" Republic %ct No 8>15 when it decreed the+participation o workers in decision and polic" making processesaAecting their rights, duties and welare7

St. Sc5ola"tica6" College v. -orre"'""ue/ whether the Labor $ecretar" has the power to assume-urisdiction over a labor dispute and its incidental controversies,causing or likel" to cause a strike or lockout in an industr"indispensable to the national interest

Hel!/Ees 0he Labor $ecretar" was eplicitl" granted b" %rticle &84)g* o the Labor Code the authorit" to assume -urisdiction over a labordispute causing or likel" to cause a strike or lockout in an industr"indispensable to the national interest, and decide the sameaccordingl" Necessaril", this authorit" to assume -urisdiction over thesaid labor dispute must include and etend to all .uestions andinclude and etend to all .uestions and controversies arisingthererom, including cases over which the Labor %rbiter has eclusive-urisdiction

%rticle &1> o the Labor Code did contemplate o eceptions theretowhere the $ecretar" is authorized to assume -urisdiction over a labordispute otherwise belonging eclusivel" to the Labor %rbiter

%rticle &84 )g* o the Labor Code was broad enough to give the$ecretar" o Labor and 6mplo"ment the power to take -urisdiction overan issue involving unair labor practice


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0he moment a worker defes a return;to;work order, he is deemedto have abandoned his -ob !t is alread" in itsel knowingl"participating in an illegal act

15imco 'n!u"trie", 'nc. v. 0rillante" 0he Labor Code vests in the $ecretar" o Labor the discretion to

determine what industries are indispensable to the national interest%ccordingl", upon the determination b" the $ecretar" o Labor thatsuch industr" is indispensable to the national interest, he will assume-urisdiction over the labor dispute in the said industr" 0his power,however, is not without an" limitation !t covers onl" strikes orlockouts adversel" aAecting the national interest

0he $ecretar"2s assumption o -urisdiction grounded on the alleged+obtaining circumstances7 and not on a determination that theindustr" involved in the labor dispute is one indispensable to the+national interest7, the standard set b" the legislature, constitutesgrave abuse o discretion amounting to lack o or ecess o-urisdiction

Calte7 re8nery (mployee" ""n. v. 0rillante" 0he labor secretar" should take cognizance o an issue which is notmerel" incidental to but essentiall" involved in the labor dispute itsel,or which is otherwise submitted to him or resolution

No particular setup or a grievance machiner" is mandated b" lawRather, %rticle &89 o the Labor Code, as incorporated b" R% 8>15,provides or onl" a single grievance machiner" in the compan" tosettle problems arising rom +interpretation or implementation o theircollective bargaining agreement and those arising rom theinterpretation or enorcement o compan" personnel policies7

0he parties will decide on the number o arbitrators who ma" hear adispute onl" when the need or it arises 6ven the law itsel does notspeci" the number o arbitrators !n eAect, the parties are aAordedthe latitude to decide or themselves the composition o the grievancemachiner" as the" fnd appropriate to a particular situation

""n. of 'n!epen!ent Union" in t5e 15il". v. NLRC % union;recognition;strike is calculated to compel the emplo"er torecognize one2s union, and not the other contending group, as theemplo"ees2 bargaining representative to work out a collectivebargaining agreement despite the striking union2s doubtul ma-orit"

status to merit voluntar" recognition and lack o ormal certifcation asthe eclusive representative in the bargaining unit

/hen a collective bargaining agreement has been dul" registered inaccordance with %rticle &41 o the Labor Code, a petition orcertifcation election or motion or intervention ma" be entertainedonl" within 89 da"s prior to the epir" date o the said agreement

@utside the said period, the petition or certifcation election or motionor intervention cannot be allowed

0o be valid, a strike must be pursued within legal bounds 0he lawprovides limits or its eercise %mong such limits are the prohibitedactivities under %rticle &8' o the Labor Code, particularl" paragraph)e*, which states that no person engaged in picketing shall? )a* commitan" act o violence, coercion, or intimidation or )b* obstruct the reeingress to or egress rom the emplo"er2s premises or lawul purposesor )c* obstruct public thoroughares 6ven i the strike is valid becauseits ob-ective or purpose is lawul, the strike ma" still be declaredinvalid where the means emplo"ed are illegal

#nion ocers are dut" bound to guide their members to respect thelaw ! instead o doing so, the ocers urge the members to violate thelaw and de" the dul" constituted authorities, their dismissal rom theservice is a -ust penalt" or sanction or their unlawul acts

%n ordinar" striking emplo"ee cannot be terminated or mereparticipation in an illegal strike 0here must be proo that hecommitted illegal acts during the strike 1> and the striker whoparticipated in the commission o illegal act must be identifed


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cannot be curtailed even in the absence o emplo"er;emplo"eerelationship

0he right is, however, not an absolute one /hile peaceul picketing isentitled to protection as an eercise o ree speech, we believe thecourts are not without power to confne or localize the sphere ocommunication or the demonstration to the parties to the labor

dispute, including those with related interest, and to insulateestablishments or persons with no industrial connection or havinginterest totall" oreign to the contet o the dispute 0hus the rightma" be regulated at the instance o third parties or +innocentb"standers7 i it appears that the inevitable result o its is to create animpression that a labor dispute with which the" have no connection orinterest eists between them and the picketing union or constitute aninvasion o their rights

%n +innocent b"stander,7 who seeks to en-oin a labor strike, mustsatis" the court that aside rom the grounds specifed in Rule 5= othe Rules o Court, it is entirel" diAerent rom, without an" connectionwhatsoever to, either part" to the dispute and, thereore, its interestsare totall" oreign to the contet thereo

rt. 9:415e"c5em 'n!u"trial Corp. v. Mol!e% 0he legal conse.uences o an illegal dismissal are reinstatement othe emplo"ee without loss o seniorit" rights and other privileges, andpa"ment o his ull backwages, inclusive o allowances, and otherbenefts or their monetar" e.uivalent 0he law intended reinstatementto be the general rule !t is onl" when reinstatement is no longereasible that pa"ment o separation pa" is awarded to an illegall"dismissed emplo"ee

Rein"tatementis the restoration to a state or condition rom which

one had been removed or separated Ba"ment o separation pa" as asubstitute or reinstatement is allowed onl" under eceptionalcircumstances, viz? )1* when reasons eist which are not attributableto the ault or be"ond the control o the emplo"er, such as, when theemplo"er, who is in severe fnancial strait and has suAered seriousbusiness losses, has ceased operations, implemented retrenchment,or abolished the position due to the installation o labor;savingdevices3 )&* when the illegall" dismissed emplo"ee has contracted adisease and his reinstatement will endanger the saet" o his co;emplo"ees3 or, )4* where strained relationship eists between theemplo"er and the dismissed emplo"ee

0he !octrine of ;"traine! relation"


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armative relie other than the ones granted in the decision o thecourt below, the Court o %ppeals is imbued with sucient authorit"and discretion to review matters, not otherwise assigned as errors onappeal, i it fnds that their consideration is necessar" in arriving at acomplete and -ust resolution o the case or to serve the interests o-ustice or to avoid dispensing piecemeal -ustice

%rticle &>( o the Labor Code, as amended, mandates that anillegall" dismissed emplo"ee is entitled to the twin relies o )a* eitherreinstatement or separation pa", i reinstatement is no longer viable,and )b* backwages


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=o5n"on > =o5n"on &15il".*, 'nc. v. =o5n"on $?ce > Sale"Union)Fe!eration of Free #orker" %n illegall" dismissed emplo"ee is entitled to reinstatement as amatter o right /here reinstatement is not easible, epedient orpractical, as where reinstatement would onl" eacerbate the tensionand strained relations between the parties, or where the relationship

between the emplo"er and emplo"ee has been undul" strained b"reason o their irreconcilable diAerences, particularl" where theillegall" dismissed emplo"ee held a managerial or ke" position in thecompan", it would be more prudent to order pa"ment o separationpa" instead o reinstatement !n other words, the pa"ment oseparation compensation in lieu o the reinstatement o an emplo"eewho was illegall" dismissed rom work shall be allowed i and onl" ithe emplo"er can prove the eistence o circumstances showing thatreinstatement will no longer be or the mutual beneft o the emplo"erand emplo"ee

Neither part" )emplo"er and emplo"ee* can claim that it has thecategorical right to choose between reinstatement and the pa"ment othe monetar" award #ltimatel", the NLRC has the authorit" toeecute its -udgment and to settle an" issue that ma" arise pertainingto the manner or details o implementing its -udgment

aving been illegall" dismissed, complainants;appellants arenormall" entitled to reinstatement to their respective ormer positionswithout loss o seniorit" rights and privileges and to pa"ment obackwages and other benefts owever, inasmuch, as the" are notentirel" aultless as the" did not ollow eact procedures in theperormance o their duties complainants;appellants should thus bereinstated to their ormer position without loss o seniorit" rights andprivileges but without an" backwages whatsoever or in thealternative, should thus be paid separation pa" each e.uivalent to 1F&month pa" or ever" "ear o service

N@K 'nt6l KnitAear Corp. 15il". v. NLRC'""ue/ whether reusal to render night work is tantamount toabandonment o duties which constitutes a -ust ground or terminationo service

Hel!/ No )see re.uisites o abandonment*

anager and other responsible ocers o the corporation all withinthe meaning o an +emplo"er7 as contemplated b" the Labor Codewho ma" be held -ointl" and severall" liable or the obligations o thecorporation to its dismissed emplo"ees

Re"taurante la" Conc5a" v. Llego %lthough as a rule, the ocers and members o a corporation arenot personall" liable or acts done in the perormance o their duties,this rule admits o eceptions, one o which is when the emplo"ercorporation is no longer eisting and is unable to satis" the -udgment

in avor o the emplo"ee, the ocers should be held liable or actingon behal o the corporation

C5ri"tian Literature Cru"a!e v. NLRC !n case o defance or non;compliance with the writ o eecution, theremed" is not or the grant in another writ o eecution o continuingbackwages up to the time o actual reinstatement 0he remed" is tofle a motion to cite the erring part" in contempt

Soli!bank Corp. v. C !n termination cases, the burden o proo rests upon the emplo"er toshow that the dismissal is or -ust and valid cause3 ailure to do sowould necessaril" mean that the dismissal was illegal

%s a rule, emplo"ees who are illegall" dismissed are entitled to ullbackwages and reinstatement to their ormer positions without loss oseniorit" rights 0here are instances, however, where reinstatement isno longer viable as where the business o the emplo"er has closed, orwhere the relations between the emplo"er and the emplo"ee havebeen so severel" strained that it is not advisable to orderreinstatement, or where the emplo"ee decides not to be reinstated/hen an emplo"ee eplicitl" pra"ed or an award o separation pa" inlieu o reinstatement, he orecloses reinstatement as a relie b"implication

rt. 9BFranci"co v. NLRC 0here has been no uniorm test to determine the eistence o anemplo"er;emplo"ee relation Menerall", courts have relied on the so;called rig5t of control te"twhere the person or whom the servicesare perormed reserves a right to control not onl" the end to beachieved but also the means to be used in reaching such end !naddition to the standard o right;o;control, the eisting economicconditions prevailing between the parties, like the inclusion o theemplo"ee in the pa"rolls, can help in determining the eistence o anemplo"er;emplo"ee relationship

>


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owever, in certain cases the control test is not sucient to give acomplete picture o the relationship between the parties, owing to thecompleit" o such a relationship where several positions have beenheld b" the worker 0here are instances when, aside rom theemplo"er2s power to control the emplo"ee with respect to the meansand methods b" which the work is to be accomplished, economicrealities o the emplo"ment relations help provide a comprehensive

anal"sis o the true classifcation o the individual, whether asemplo"ee, independent contractor, corporate ocer or some othercapacit"

0he better approach would thereore be to adopt a two;tiered testinvolving? )1* the putative emplo"er2s power to control the emplo"eewith respect to the means and methods b" which the work is to beaccomplished3 and )&* the underl"ing economic realities o the activit"or relationship

broa!er economic reality te"t? 0he determination o therelationship between emplo"er and emplo"ee depends upon thecircumstances o the whole economic activit", && such as? )1* theetent to which the services perormed are an integral part o theemplo"er2s business3 )&* the etent o the worker2s investment ine.uipment and acilities3 )4* the nature and degree o controleercised b" the emplo"er3 )'* the worker2s opportunit" or proft andloss3 )5* the amount o initiative, skill, -udgment or oresight re.uiredor the success o the claimed independent enterprise3 )8* thepermanenc" and duration o the relationship between the worker andthe emplo"er3 and )>* the degree o dependenc" o the worker uponthe emplo"er or his continued emplo"ment in that line o business

!n a business establishment, an identifcation card is provided notonl" as a securit" measure but mainl" to identi" the holder thereo asa bona fde emplo"ee o the frm that issues it 0ogether with the cashvouchers covering an emplo"ee2s salaries or the months stated

therein, these matters constitute substantial evidence ade.uate tosupport a conclusion that one is reall" an emplo"ee

% corporation who registers its workers with the $$$ is proo thatthe latter were the ormer2s emplo"ees 0he coverage o $ocial$ecurit" Law is predicated on the eistence o an emplo"er;emplo"eerelationship

% !iminution of payis pre-udicial to the emplo"ee and amounts toconstructive dismissal Con"tructive !i"mi""al is an involuntar"resignation resulting in cessation o work resorted to when continuedemplo"ment becomes impossible, unreasonable or unlikel"3 whenthere is a demotion in rank or a diminution in pa"3 or when a clear

discrimination, insensibilit" or disdain b" an emplo"er becomesunbearable to an emplo"ee /here an emplo"ee ceases to work dueto a demotion o rank or a diminution o pa", an unreasonablesituation arises which creates an adverse working environmentrendering it impossible or such emplo"ee to continue working or hisemplo"er ence, his severance rom the compan" was not o his ownmaking and thereore amounted to an illegal termination o

emplo"ment

Lambo v. NLRC 0here are two categories o emplo"ees paid b" results? )1* thosewhose time and perormance are supervised b" the emplo"er )ere,there is an element o control and supervision over the manner as tohow the work is to be perormed % piece;rate worker belongs to thiscategor" especiall" i he perorms his work in the compan" premises*3and )&* those whose time and perormance are unsupervised )ere,the emplo"er2s control is over the result o the work /orkers onpak"ao and taka" basis belong to this group*


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emplo"ment ere absence is not sucient !t must be accompaniedb" maniest acts unerringl" pointing to the act that the emplo"eesimpl" does not want to work an"more

Not all .uitclaims are per se invalid or against public polic"


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0he principal test or determining whether an emplo"ee is a pro-ectemplo"ee or a regular emplo"ee is whether the pro-ect emplo"ee wasassigned to carr" out a specifc pro-ect or undertaking, the durationand scope o which were specifed at the time the emplo"ee wasengaged or that pro-ect % proect employee is one whoseemplo"ment has been fed or a specifc pro-ect or undertaking, thecompletion or termination o which has been determined at the time

o the engagement o the emplo"ee or where the work or service tobe perormed is seasonal in nature and the emplo"ment is or theduration o the season

% pro-ect emplo"ee or a member o a work pool ma" ac.uire thestatus o a regular emplo"ee when the ollowing concur? )1* 0here is acontinuous rehiring o pro-ect emplo"ees even ater theO cessation oa pro-ect3 and )&* 0he tasks perormed b" the alleged +pro-ectemplo"ee7 are vital, necessar" and indispensable to the usualbusiness or trade o the emplo"er

Low volume o work and belatedl", completion o pro-ect are notvalid causes or dismissal under %rticles &=& and &=4 o the LaborCode 0hus, petitioner is entitled to reinstatement without loss oseniorit" rights and other privileges, and to her ull backwages,inclusive o allowances, and to her other benefts or their monetar"e.uivalent computed rom the time her compensation was withheldrom her up to the time o her actual reinstatement owever,compl"ing with the principle" of ;"u"pen"ion of Aork< an! ;noAork, no pay


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greater the supervision and control the hirer eercises, the more likel"the worker is deemed an emplo"ee 0he converse holds true as well Kthe less control the hirer eercises, the more likel" the worker isconsidered an independent contractor

% radio broadcast specialist who works under minimal supervision isan independent contractor


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defned as ollows? +0he term Phousehelper2 as used herein iss"non"mous to the term Pdomestic servant2 and shall reer to an"person, whether male or emale, who renders services in and aboutthe emplo"er2s home and which services are usuall" necessar" ordesirable or the maintenance and en-o"ment thereo, and ministerseclusivel" to the personal comort and en-o"ment o the emplo"er2samil"7

$uch househelper or domestic servant is emplo"ed in theemplo"er2s home to minister eclusivel" to the personal comort anden-o"ment o the emplo"er2s amil" $uch defnition covers amil"drivers, domestic servants, laundr" women, "a"as, gardeners,housebo"s and similar househelps

0he criteria is the personal comort and en-o"ment o the amil" othe emplo"er in the home o said emplo"er /hile it ma" be true thatthe nature o the work o a househelper, domestic servant orlaundr"woman in a home or in a compan" staAhouse ma" be similarin nature, the diAerence in their circumstances is that in the ormerinstance the" are actuall" serving the amil" while in the latter case,whether it is a corporation or a single proprietorship engaged inbusiness or industr" or an" other agricultural or similar pursuit,service is being rendered in the staAhouses or within the premises othe business o the emplo"er !n such instance, the" are emplo"ees othe compan" or emplo"er in the business concerned entitled to theprivileges o a regular emplo"ee

0he mere act that the househelper or domestic servant is workingwithin the premises o the business o the emplo"er and in relation toor in connection with its business, as in its staAhouses or its guest oreven or its ocers and emplo"ees, warrants the conclusion that suchhousehelper or domestic servant is and should be considered as aregular emplo"ee o the emplo"er and not as a mere amil"househelper or domestic servant as contemplated in Rule G!!!, $ection

1)b*,


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Coca Cola 0ottler" &15il".*, 'nc. v. Climaco % provision in a Retainer %greement that a worker is on call duringemergenc" cases did not make him a regular emplo"ee

0he schedule o work and the re.uirement to be on call oremergenc" cases do not amount to such control, but are necessar"

incidents to the Retainership %greement

illamaria, =r. v. C 0he boun!ary)5ulog "c5eme creates both emplo"er;emplo"eeand vendor;vendee relationship 0he boun!ary "y"tem is a schemeb" an ownerFoperator engaged in transporting passengers as acommon carrier to primaril" govern the compensation o the driver,that is, the latter2s dail" earnings are remitted to the ownerFoperatorless the ecess o the boundar" which represents the driver2scompensation #nder this s"stem, the ownerFoperator eercisescontrol and supervision over the driver 0he management o thebusiness is still in the hands o the ownerFoperator, who, being theholder o the certifcate o public convenience, must see to it that thedriver ollows the route prescribed b" the ranchising and regulator"authorit", and the rules promulgated with regard to the businessoperations 0he act that the driver does not receive fed wages butonl" the ecess o the +boundar"7 given to the ownerFoperator is notsucient to change the relationship between them !ndubitabl", thedriver perorms activities which are usuall" necessar" or desirable inthe usual business or trade o the ownerFoperator

rt. 9B2'CMC v. NLRC :ailure to .uali" as a regular emplo"ee in accordance with thereasonable standards o the emplo"er is a -ust cause or terminating a

probationar" emplo"ee specifcall" recognized under %rticle &=1

% probationary employeeis one who is on trial b" an emplo"erduring which the emplo"er determines whether or not he is .ualifedor permanent emplo"ment % probationar" appointment is made toaAord the emplo"er an opportunit" to observe the ftness o aprobationer while at work, and to ascertain whether he will become aproper and ecient emplo"ee 0he word +probationar"7, as used todescribe the period o emplo"ment, implies the purpose o the term orperiod, but not its length


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which give educational institution the right to choose who shouldteach

Mit"ubi"5i Motor" 15il". Corp. v. C5ry"ler 15il". Labor Union %n emplo"er, in the eercise o its management prerogative, ma"hire an emplo"ee on a probationar" basis in order to determine his

ftness to perorm work #nder %rticle &=1 o the Labor Code, theemplo"er must inorm the emplo"ee o the standards or which hisemplo"ment ma" be considered or regularization $uch probationar"period, unless covered b" an apprenticeship agreement, shall noteceed 8 months rom the date the emplo"ee started working 0heemplo"ee2s services ma" be terminated or -ust cause or or his ailureto .uali" as a regular emplo"ee based on reasonable standards madeknown to him

0he probationar" period o 8 months consists o 1=9 da"s

0he ollowing grounds would -usti" the dismissal o an emplo"ee?)a* $erious misconduct or willul disobedience b" the emplo"ee o thelawul orders o the emplo"er or representative in connection with his

work3 )b* Mross and habitual neglect b" the emplo"ee o his duties3 )c*:raud or willul breach b" the emplo"ee o the trust reposed in him b"his emplo"er or dul" authorized representative3 )d* Commission o acrime or oAense b" the emplo"ee against the person o his emplo"eror o an" immediate member o his amil" or his dul" authorizedrepresentative3 and )e* @ther causes analogous to the oregoing

#nder %rticle &=& o the Labor Code, an unsatisactor" rating can bea -ust cause or dismissal onl" i it amounts to gross and habitualneglect o duties Gro"" negligencehas been defned to be the wantor absence o even slight care or diligence as to amount to a recklessdisregard o the saet" o person or propert" !t evinces a thoughtlessdisregard o conse.uences without eerting an" eAort to avoid them

0he normal conse.uences o illegal dismissal are reinstatementwithout loss o seniorit" rights and the pa"ment o backwagescomputed rom the time the emplo"ee2s compensation was withheldrom him

Retrenc5ment is an authorized cause or termination oemplo"ment which the law accords an emplo"er who is not makinggood in its operations in order to cut back on epenses or salariesand wages b" la"ing oA some emplo"ees 0he purpose oretrenchment is to save a fnanciall" ailing business establishmentrom eventuall" collapsing

rt. 9B9Serrano v. NLRC 0he re.uirement to give a written notice o termination at least 49da"s in advance is a re.uirement o %rt &=4 o the Labor Code

/hat the law re.uires is a written notice to the emplo"ees

concerned and that re.uirement is mandator" 0he notice must alsobe given at least one month in advance o the intended date oretrenchment to enable the emplo"ees to look or other means oemplo"ment and thereore to ease the impact o the loss o their -obsand the corresponding income

0he purpose o such previous notice is to give the emplo"ee sometime to prepare or the eventual loss o his -ob as well as the D@L6 theopportunit" to ascertain the verit" o the alleged authorized cause otermination $uch purpose would not be served b" the simpleepedient o pa"ing 49 da"s salar" in lieu o notice o an emplo"ee2simpending dismissal, as b" then the loss o emplo"ment would havebeen a ait accompli

0he order to pa" ull backwages is a conse.uence o the emplo"er2saction in dismissing an emplo"ee without notice which makes saiddismissal ineAectual 0he emplo"ee is considered not to have beenterminated rom his emplo"ment until it is fnall" determined that hisdismissalFtermination o emplo"ment was or cause and, thereore, heshould be paid his salaries in the interim

gabon v. NLRC 0o dismiss an emplo"ee, the law re.uires not onl" the eistence o a-ust and valid cause but also en-oins the emplo"er to give theemplo"ee the opportunit" to be heard and to deend himsel %rticle&=& o the Labor Code enumerates the -ust causes or termination b"

the emplo"er? )a* serious misconduct or willul disobedience b" theemplo"ee o the lawul orders o his emplo"er or the latter2srepresentative in connection with the emplo"ee2s work3 )b* gross andhabitual neglect b" the emplo"ee o his duties3 )c* raud or willulbreach b" the emplo"ee o the trust reposed in him b" his emplo"er orhis dul" authorized representative3 )d* commission o a crime oroAense b" the emplo"ee against the person o his emplo"er or an"immediate member o his amil" or his dul" authorized representative3and )e* other causes analogous to the oregoing

%bandonment is the deliberate and un-ustifed reusal o anemplo"ee to resume his emplo"ment !t is a orm o neglect o dut",hence, a -ust cause or termination o emplo"ment b" the emplo"er

1'


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:or a valid fnding o abandonment, these two actors should bepresent? )1* the ailure to report or work or absence without valid or-ustifable reason3 and )&* a clear intention to sever emplo"er;emplo"ee relationship, with the second as the more determinativeactor which is maniested b" overt acts rom which it ma" bededuced that the emplo"ees has no more intention to work 0he intentto discontinue the emplo"ment must be shown b" clear proo that it

was deliberate and un-ustifed

Subcontracting or another compan" clearl" shows the intentionto sever the emplo"er;emplo"ee relationship

%n emplo"ee who deliberatel" absented rom work without leave orpermission rom his emplo"er, or the purpose o looking or a -obelsewhere, is considered to have abandoned his -ob

0he procedure or terminating an emplo"ee is ound in


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/here the dismissal is or a -ust cause, he lack o statutor" dueprocess should not nulli" the dismissal, or render it illegal, orineAectual owever, the emplo"er should indemni" the emplo"ee orthe violation o his statutor" rights 0he indemnit" to be imposedshould be stiAer to discourage the abhorrent practice o +dismiss now,pa" later7 0he sanction should be in the nature o indemnifcation orpenalt" and should depend on the acts o each case, taking intospecial consideration the gravit" o the due process violation o theemplo"er

%n emplo"er is liable to pa" indemnit" in the orm o nominal!amage" to an emplo"ee who has been dismissed i, in eAectingsuch dismissal, the emplo"er ails to compl" with the re.uirements odue process

ierne" v. NLRCsee supra

u"tria v. NLRC 0he provision which governs the dismissal o emplo"ees, iscomprehensive enough to include religious corporations %rticle &>= othe Labor Code on post;emplo"ment states that +the provisions o this0itle shall appl" to all establishments or undertakings, whether orproft or not7 $ection 1, Rule 1,


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/illul disobedience o the emplo"er2s lawul orders, as a -ust causeor the dismissal o an emplo"ee, envisages the concurrence o atleast two re.uisites? )1* the emplo"ee2s assailed conduct must havebeen willul or intentional, the willulness being characterized b" a+wrongul and perverse attitude73 )&* the order violated must havebeen reasonable, lawul, made known to the emplo"ee and mustpertain to the duties which he had been engaged to discharge 11


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thus? +$ec > 0ermination o emplo"ment b" emplo"er Q 0he -ustcauses or terminating the services o an emplo"ee shall be thoseprovided in %rticle &=& o the Code 0he separation rom work o anemplo"ee or a -ust cause does not entitle him to the termination pa"provided in Code, without pre-udice, however, to whatever rights,benefts and privileges he ma" have under the applicable individual orcollective bargaining agreement with the emplo"er or voluntar"emplo"er polic" or practice7

%rticle &=4, in turn, specifes the authorized causes or thetermination o emplo"ment, viz? )a* installation o labor;savingdevices3 )b* redundanc"3 )c* retrenchment to prevent losses3 and )d*closing or cessation o operation o the establishment or undertakingunless the closing is or the purpose o circumventing the provisions olaw

%rticle &=' provides that an emplo"er would be authorized toterminate the services o an emplo"ee ound to be suAering rom an"disease i the emplo"ee2s continued emplo"ment is prohibited b" lawor is pre-udicial to his health or to the health o his ellow emplo"ees

0he installation o labor;saving devices contemplates theinstallation o machiner" to eAect econom" and ecienc" in itsmethod o production

Re!un!ancy eists where the services o an emplo"ee are inecess o what would reasonabl" be demanded b" the actualre.uirements o the enterprise % position is redundant when it issuperuous, and superuit" o a position or positions could be theresult o a number o actors, such as the overhiring o workers, adecrease in the volume o business or the dropping o a particular lineor service previousl" manuactured or undertaken b" the enterprise%n emplo"er has no legal obligation to keep on the pa"roll emplo"eesmore than the number needed or the operation o the business

Retrenc5ment is an economic ground to reduce the number oemplo"ees !n order to be -ustifed, the termination o emplo"ment b"reason o retrenchment must be due to business losses or reverseswhich are serious, actual and real Retrenchment is normall" resortedto b" management during periods o business reverses and economicdiculties occasioned b" such events as recession, industrialdepression, or seasonal uctuations !t is an act o the emplo"er oreducing the work orce because o losses in the operation o theenterprise, lack o work, or considerable reduction on the volume obusiness 0he institution o +new methods or more ecient machiner",or o automation7 is technicall" a ground or termination oemplo"ment b" reason o installation o labor;saving devices but

where the introduction o these methods is resorted to not merel" toeAect greater ecienc" in the operations o the business butprincipall" because o serious business reverses and to avert urtherlosses, the device could then veril" be considered one oretrenchment

0he pa"ment o separation pa" would be due when a dismissal is onaccount o an authorized cause 0he amount o separation pa"depends on the ground or the termination o emplo"ment % dismissaldue to the installation o labor saving devices, redundanc" )%rticle&=4* or disease )%rticle &='*, entitles the worker to a separation pa"e.uivalent to +one )1* month pa" or at least one )1* month pa" orever" "ear o service, whichever is higher7 /hen the termination oemplo"ment is due to retrenchment to prevent losses, or to closure orcessation o operations o establishment or undertaking not due toserious business losses or fnancial reverses, the separation pa" isonl" an e.uivalent o +one )1* month pa" or at least one;hal )1F&*month pa" or ever" "ear o service, whichever is higher7 !n theabove instances, a raction o at least si )8* months is considered asone )1* whole "ear

!n order to validl" eAect retrenchment, the emplo"er must observetwo other re.uirements, viz? )a* service o a prior written notice o atleast one month on the workers and the Department o Labor and6mplo"ment, and )b* pa"ment o the due separation pa"

Ha @uan Re"taurant v. NLRC $eparation pa" shall be allowed as a measure o social -ustice onl"in those instances A5ere t5e employee i" vali!ly !i"mi""e! forcau"e" ot5er t5an "eriou" mi"con!uct or t5o"e reIecting on5i" moral c5aracter /here the reason or the valid dismissal is, oreample, habitual intoication or an oAense involving moral turpitude,like thet or illicit seual relations with a ellow worker, the emplo"er

ma" not be re.uired to give the dismissed emplo"ee separation pa",or fnancial assistance, or whatever other name it is called, on theground o social -ustice

$eparation pa" thereore, depends on the cause o dismissal, andma" be accordingl" awarded provided that the dismissal does not allunder either o two circumstances? )1* there was serious misconduct,or )&* the dismissal reected on the emplo"ee2s moral character

Mi"con!uctis improper or wrongul conduct !t is the transgressiono some established and defnite rule o action, a orbidden act, adereliction o dut", willul in character, and implies wrongul intent and

1=


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not mere error o -udgment 0o be a valid cause or termination, themisconduct must be serious

"ian -erminal", 'nc. v. NLRCsee supra

King of King" -ran"port, 'nc. v. Mamac :or termination o emplo"ment based on -ust causes as defned in%rticle &=& o the Code? )a* % written notice served on the emplo"eespeci"ing the ground or grounds or termination, and giving saidemplo"ee reasonable opportunit" within which to eplain his side )b*% hearing or conerence during which the emplo"ee concerned, withthe assistance o counsel i he so desires is given opportunit" torespond to the charge, present his evidence, or rebut the evidencepresented against him )c* % written notice o termination served onthe emplo"ee, indicating that upon due consideration o all thecircumstances, grounds have been established to -usti" histermination

!n case o termination, the oregoing notices shall be served on theemplo"ee2s last known address

0he ollowing should be considered in terminating the services oemplo"ees?

)1* 0he frst written notice to be served on the emplo"ees shouldcontain the specifc causes or grounds or termination against them,and a directive that the emplo"ees are given the opportunit" tosubmit their written eplanation within a reasonable period;Rea"onable opportunity


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0ermination o an emplo"ee2s services because o retrenchment toprevent urther losses or redundanc", is governed b" %rticle &=4 o theLabor Code

0ermination o services under %rt &=4 should be distinguished romtermination o emplo"ment b" reason o some blameworth" act oromission on the part o the emplo"ee, in which case the applicableprovision is %rticle &=& o the Labor Code

$ections & and 5 o Rule G!I entitled +0ermination o 6mplo"ment?7o the +Rules to !mplement the Labor Code7 read as ollows?

$ec & Notice o dismissal KK %n" emplo"er who seeks to dismiss aworker shall urnish him a written notice stating the particular acts oromission constituting the grounds or his dismissal !n cases oabandonment o work, the notice shall be served at the worker2s lastknown address

$ec 5 %nswer and hearing KK 0he worker ma" answer the allegationsstated against him in the notice o dismissal within a reasonableperiod rom receipt o such notice 0he emplo"er shall aAord theworker ample opportunit" to be heard and to deend himsel with theassistance o his representative i he so desires

/here the ground or dismissal or termination o services does notrelate to a blameworth" act or omission on the part o the emplo"ee,there is no need or an investigation and hearing to be conducted b"the emplo"er who does not allege an" maleasance or noneasance onthe part o the emplo"ee !n such case, there are no allegations whichthe emplo"ee should reute and deend himsel rom

0he emplo"ee ma" contest the realit" or good aith character o theretrenchment or redundanc" asserted as grounds or termination oservices 0he appropriate orum or such controversion would,however, be the Department o Labor and 6mplo"ment and not aninvestigation or hearing to be held b" the emplo"er itsel !t isprecisel" or this reason that an emplo"er seeking to terminateservices o an emplo"ee or emplo"ees because o +closure oestablishment and reduction o personnel7, is legall" re.uired to givea written notice not onl" to the emplo"ee but also to the Departmento Labor and 6mplo"ment at least one month beore eAectivit" date othe termination

1olymart 1aper 'n!u"trie", 'nc. v. NLRC Retrenc5ment is a management prerogative, a means to protectand preserve the emplo"er2s viabilit" and ensure his survival !t is oneo the economic grounds to dismiss an emplo"ee resorted to b" anemplo"er primaril" to avoid or minimize business losses !n thisregard, the emplo"er bears the burden to prove his allegation oeconomic or business reverses, otherwise, it necessaril" means thatthe dismissal o an emplo"ee was not -ustifed

Retrenchment or +la";oA7 is the termination o emplo"mentinitiated b" the emplo"er through no ault o the emplo"ees andwithout pre-udice to the latter, resorted to b" management duringperiods o business recession, industrial depression, or seasonaluctuations or during lulls occasioned b" lack o orders, shortage omaterials, conversion o the plant or a new production program or theintroduction o new methods or more ecient machiner", or oautomation $impl" put, it is an act o the emplo"er o dismissingemplo"ees because o losses in the operation o a business, lack owork, and considerable reduction on the volume o his business

%rt &=4 o the Labor Code, as amended, recognizes retrenchment

as a mode o terminating an emplo"ment relationship #nder thisprovision, there are three basic re.uisites or a valid retrenchment0hese are? )a* the retrenchment is necessar" to prevent losses andsuch losses are proven3 )b* written notice to the emplo"ees and to theD@L6 at least one month prior to the intended date o retrenchment,and )c* pa"ment o separation pa" e.uivalent to one month pa" or atleast 1F& month2s pa" or ever" "ear o service, whichever is higher

0o -usti" retrenchment, the +loss7 reerred to in %rt &=4 cannot be-ust an" kind or amount o loss 0he ollowing standard which acompan" must meet to -usti" retrenchment? :irstl", the lossesepected should be substantial and not merel" de minimis in etent !the loss purportedl" sought to be orestalled b" retrenchment is

clearl" shown to be insubstantial and inconse.uential in character, thebonafde nature o the retrenchment would appear to be seriousl" in.uestion $econdl", the substantial loss apprehended must bereasonabl" imminent, as such imminence can be perceived ob-ectivel"and in good aith b" the emplo"er


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0he emplo"er bears the burden o proving an allegation o theeistence or imminence o substantial losses, which b" its nature is anarmative deense !t is the dut" o the emplo"er to prove with clearand satisactor" evidence that legitimate business reasons eist to-usti" retrenchment :ailure to do so inevitabl" results in a fnding thatthe dismissal is un-ustifed

Nort5 +avao Mining Corp. v. NLRC %rt &=4 governs the grant o separation benefts +in case oclosures or cessation o operation7 o business establishments +N@0due to serious business losses or fnancial reverses 7 /here,however, the closure was due to business losses the Labor Code doesnot impose an" obligation upon the emplo"er to pa" separationbenefts

%rt &=4 o the Labor Code does not obligate an emplo"er to pa"separation benefts when the closure is due to losses

Nat6l Fe!eration of Labor v. NLRC'""ue/whether or not an emplo"er that was compelled to cease itsoperation because o the compulsor" ac.uisition b" the government oits land or purposes o agrarian reorm, is liable to pa" separation pa"to its aAected emplo"ees

Hel!/No 0he closure contemplated under %rticle &=4 o the LaborCode is a unilateral and voluntar" act on the part o the emplo"er toclose the business establishment as ma" be gleaned rom the wordingo the said legal provision that +0he emplo"er ma" also terminate theemplo"ment o an" emplo"ee due to 7 0he use o the word +ma",7in a statute, denotes that it is director" in nature and generall"permissive onl" !n other words, %rticle &=4 o the Labor Code does not

contemplate a situation where the closure o the businessestablishment is orced upon the emplo"er and ultimatel" or thebeneft o the emplo"ees

rt. 9BJSy v. C !n termination cases, the burden is upon the emplo"er to show b"substantial evidence that the termination was or lawul cause andvalidl" made %rticle &>>)b* o the Labor Code puts the burden oproving that the dismissal o an emplo"ee was or a valid orauthorized cause on the emplo"er, without distinction whether theemplo"er admits or does not admit the dismissal :or an emplo"ee2s

dismissal to be valid, )a* the dismissal must be or a valid cause and)b* the emplo"ee must be aAorded due process

%rticle &=' o the Labor Code authorizes an emplo"er to terminatean emplo"ee on the ground o disease owever, in order to validl"terminate emplo"ment on this ground,


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rom his emplo"er, as i he were re;appl"ing or the -ob !t will then beup to the emplo"er to determine whether or not his service would becontinued ! the emplo"er accepts said withdrawal, the emplo"eeretains his -ob ! the emplo"er does not the emplo"ee cannot claimillegal dismissal or the emplo"er has the right to determine who hisemplo"ees will be

Reye" v. C %cceptance o a resignation tendered b" an emplo"ee is necessar"to make the resignation eAective

% re.uest or benefts granted to retrenched emplo"ees during atime when an emplo"er is in the process o retrenching its emplo"eesis tantamount to a recognition o the eistence o a valid cause orretrenchment

lfaro v. C Menerall", an emplo"ee who voluntaril" resigns rom emplo"ment isnot entitled to separation pa" %n eception is when the emplo"er and

the emplo"ee agreed to a scheme hereb" the ormer would receiveseparation pa" despite having resigned voluntaril"

oluntary re"ignationis defned as the act o an emplo"ee, whofnds himsel in a situation in which he believes that personal reasonscannot be sacrifced in avor o the eigenc" o the service3 thus, hehas no other choice but to disassociate himsel rom his emplo"ment

rt. 9BGlobe -elecom, 'nc. v. Floren!o)Flore" Con"tructive !i"mi""aleists where there is cessation o workbecause +continued emplo"ment is rendered impossible,

unreasonable or unlikel", as an oAer involving a demotion in rank anda diminution in pa"7

0he unauthorized absence o an emplo"ee should not lead to thedrastic conclusion that he has chosen to abandon his work 0oconstitute abandonment, there must be? )a* ailure to report or workor absence without valid or -ustifable reason3 and, )b* a clearintention, as maniested b" some overt act, to sever the emplo"er;emplo"ee relationship % charge o abandonment is totall"inconsistent with the immediate fling o a complaint or illegaldismissal3 more so, when it includes a pra"er or reinstatement

!n constructive dismissal, the emplo"er has the burden o provingthat the transer and demotion o an emplo"ee are or -ust and validgrounds such as genuine business necessit" 0he emplo"er must beable to show that the transer is not unreasonable, inconvenient, orpre-udicial to the emplo"ee !t must not involve a demotion in rank ora diminution o salar" and other benefts ! the emplo"er cannotovercome this burden o proo, the emplo"ee2s demotion shall betantamount to unlawul constructive dismissal

15il. 'n!u"trial Security gency Corp. v. +apiton Con"tructive !i"mi""al is defned as a +.uitting becausecontinued emplo"ment is rendered impossible, unreasonable orunlikel"3 as an oAer involving a demotion in rank and diminution inpa"7 @n the other hand, abandonment o work means a clear,deliberate and un-ustifed reusal o an emplo"ee to resume hisemplo"ment and a clear intention to sever the emplo"er;emplo"eerelationship %bandonment is incompatible with constructivedismissal

ere absence or ailure to report or work is not tantamount toabandonment o work 6ven the ailure to report or work ater a

notice to return to work has been served does not necessaril"constitute abandonment nor does it bar reinstatement

%n emplo"er has the prerogative to transer and reassign itsemplo"ees to meet the re.uirements o its business 2::or instance,where the rotation o emplo"ees rom the da" shit to the night shitwas a standard operating procedure of management, an emplo"eewho had been on the da" shit or sometime ma" be transerred to thenight shit$imilarl", transers can be eAected pursuant to a companypolicy to transer emplo"ees rom one place o work to another placeo work owned b" the emplo"er to prevent connivance among themLikewise, an emplo"er has the right to transer an emplo"ee toanother oce in the eercise o what it took to be sound business

-udgment and in accordance with pre-determined and establishedoce policy and practice !n securit" services, the transer connotes achanging o guards or echange o their posts, or their reassignmentto other posts owever, all are considered given their respectiveposts

0he prerogative o the management to transer its emplo"ees mustbe eercised without grave abuse o discretion 0he eercise o theprerogative should not deeat an emplo"ee2s right to securit" otenure !he employer"s pri#ilege to transfer its employees to di$erentwor%stations cannot be used as a subterfuge to rid itself of anundesirable wor%er

&&


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15ilippine #irele"" , 'nc. v. NLRC +i"mi""al is +an involuntar" resignation resorted to whencontinued emplo"ment is rendered impossible, unreasonable orunlikel"3 when there is a demotion in rank andFor a diminution in pa"3or when a clear discrimination, insensibilit" or disdain b" an emplo"erbecomes unbearable to the emplo"ee7

oluntary re"ignationis defned as the act o an emplo"ee who+fnds himsel in a situation where he believes that personal reasonscannot be sacrifced in avor o the eigenc" o the service and he hasno other choice but to disassociate himsel rom his emplo"ment7

0here is no demotion where there is no reduction in position, rank orsalar" as a result o such transer

Globe -elecom v. Cri"ologo Re"ignationis the voluntar" act o an emplo"ee who fnds herselin a situation where she believes that personal reasons cannot besacrifced in avor o the eigenc" o the service and that she has no

other choice but to disassociate hersel rom emplo"ment

rt. 9B:Lope% v. Nat6l Steel Corp. :or an emplo"ee to validl" claim retirement benefts under %rt &=>o the Labor Code, petitioner must have complied with there.uirements or eligibilit" under the statute or such retirementbenefts

No retirement benefts are pa"able in instances o resignations ortermination or a cause

rt. 94Callanta v. Carnation 15ilippine", 'nc. 0he dismissal without -ust cause o an emplo"ee rom hisemplo"ment constitutes a violation o the Labor Code and itsimplementing rules and regulations $uch violation, however, does notamount to an +oAense7 as understood under %rticle &(1 o the LaborCode !n its broad sense, an oAense is an illegal act which does notamount to a crime as defned in the penal law, but which b" statutecarries with it a penalt" similar to those imposed b" law or thepunishment o a crime !t is in this sense that a general penalt" clauseis provided under %rticle &=( o the Labor Code which provides that+ an" violation o the provisions o this code declared to be unlawul

or penal in nature shall be punished with a fne o not less than @ne0housand Besos B1,99999O nor more than 0en 0housand Besos19,99999O, or imprisonment o not less than three 4O months normore than three 4O "ears, or both such fne and imprisonment at thediscretion o the court7

#nlike in cases o commission o an" o the prohibited activitiesduring strikes or lockouts under %rticle &85, unair labor practicesunder %rticle &'=, &'( and &59 and illegal recruitment activities under%rticle 4=, among others, which the Code itsel declares to beunlawul, termination o an emplo"ment without -ust or valid cause isnot categorized as an unlawul practice

0he relies principall" sought b" an emplo"ee who was illegall"dismissed rom his emplo"ment are reinstatement to his ormerposition without loss o seniorit" rights and privileges, i an",backwages and damages, in case there is bad aith in his dismissal %san armative relie, reinstatement ma" be ordered, with or withoutbackwages /hile ordinaril", reinstatement is a concomitant obackwages, the two are not necessaril" complements, nor is theaward o one a condition precedent to an award o the other %nd, in

proper cases, backwages ma" be awarded without orderingreinstatement !n either case, no penalt" o fne nor imprisonment isimposed on the emplo"er upon a fnding o illegalit" in the dismissal


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rt. 942-e7on Manufacturing v. Millena prescriptive period or mone" claims? Meneral rule? %ll mone" claimsarising rom emplo"er;emplo"ee relations accruing during theeAectivit" o this Code shall be fled within three "ears rom the timethe cause o action accrued3 otherwise the" shall be orever barred

Lu!o > Luym Corp. v. Saorni!o 6ception? ! complainant;emplo"ee2s cause o action has not "etaccrued, as when negotiations are still ongoing, then the 4;"earprescriptive period does not set

&'

labrel doctrines

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