Termination of

Employment
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 Overview of Causes
Termination by Employer

• with Just Cause (Article 297)

• with Authorized Cause (Article 298)
• Disease (Article 299)

Termination by Employee (Resignation)

• Article 300

Retirement

• Article 302
 Dismissal by Employer
Just Cause Authorized
• Serious Misconduct Causes
• Willful Disobedience
• Gross and Habitual • Labor Saving
Negligence Device
• Fraud or Loss of Trust • Redundancy
• Crime against the
Employer • Retrenchment
• Analogous cases • Closure
 Just Cause Article 297
(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 any immediate member of his family or
his duly authorized representative; and
(e) Other causes analogous to the foregoing.
Serious Misconduct
• there must be a misconduct which must be grave and aggravated in character;
• the misconduct must relate to the performance of the employee's duties, and
• the employee must become unfit to continue working for the employer.
Willful Disobedience of the lawful orders of the employer
• there must be disobedience or insubordination which must be willful or intentional;
characterized by a wrongful or perverse attitude;
• the order violated must be reasonable, lawful and made known to the employee; and
• the order must pertain to the duties which he has been engaged to discharge.
Gross and habitual neglect by the employee of his / her duties
• there must be neglect of duties; and
• the negligence must be both gross and habitual in character.
Fraud or willful breach of trust reposed in him
by the employer
• there must be an act, omission, or concealment which
justifies the loss of trust and confidence of the employer
on the employee;
• the employee must be holding a position of trust and
confidence;
• there is real loss of trust and confidence - it is not
simulated nor an afterthought to justify an earlier action
taken in bad faith
Fraud or Wilfull breach of trust

Managerial More
Trust
Supervisory
Less
Rank and File Trust
Commission of crime or offense by the employee against the
person of the employer, employer's immediate family or duly
authorized representative
• there must be an act or omission prohibited by law and
• the act or omission must be voluntary or willful on the part of the employee

Causes analogous to the foregoing

• there must be an act or omission similar to those specified under Article 297
and
• the act or omission must be voluntary or willful on the part of the employees.
 Procedure in Just Cause Terminations
Just Cause First Notice
(to explain)
• Serious Misconduct
• Opportunity to
• Willful Disobedience Explain
• Gross and Habitual
Negligence
• Fraud or Loss of Trust
• Crime against the This Photo by Unknown Author is
licensed under CC BY-SA-NC

Employer Second Notice

• Analogous cases (of action)
Facts: Bobby has been a machine operator for Bini Corporation for 18
years. One day, he went to the parking lot to clean his motorcycle seat
using the alcohol provided by the company for the employees' use
within the company premises. Afterward, he submitted a bag for
inspection before going home. The security guard noticed a bottle.
Roberto realized that the alcohol was still in his bag. Roberto panicked
and threw the bottle away before the security guard could retrieve it.
When the security guard recovered the bottle, he discovered that it
contained ethyl alcohol belonging to the company.

Can the company validly terminate Bobby for serious misconduct and
fraud or willful breach of trust?
Supreme Court: The following factors should be considered in determining whether
theft of company property by an employee warrants the penalty of dismissal: (a)
period of employment and existence of a derogatory record; (b) value of the
property involved; (c) cost of damage to the employer; (d) effect on the viability of
employer's operation or company's interest; and (e) employee's position.

Roberto had been in URC's employ for 18 years, and this is the first time that he
had been involved in taking company property. The bottle of ethyl alcohol valued at
₱60.00 is very minimal. URC did not lose anything as the bottle was timely
retrieved. Further, it was not shown that Roberto's retention would work undue
prejudice to the viability of URC's operations, or is patently inimical to its interest.
Neither does Roberto occupy a position of trust and confidence, the loss of which
would justify his dismissal. Hence, the Court finds that the penalty of dismissal is
not proportional with Roberto's misconduct. His preventive suspension was a
sufficient penalty for the misdemeanor.
URC v Maglalang, G.R. No. 255864. July 06, 2022, Lopez, M., J.
 Authorized Cause Article 298

Installation of
Redundancy
LSD

Closure
Retrenchment • Closure due to
financial losses
Installation of Labor Saving Devices

• there is an introduction of machinery, equipment or other device done in good faith

• the prupose is to save on cost, enhance efficiency or similar aim
• there must be no other option except to terminate the employment of workers affected
• there must be fair and reasonable criteria in selecting employees to be terminated

Redundancy

• there must be superfluous positions or services of employees;

• the positions or services are in excess of what is reasonably demanded by the actual
requirements of the enterprise to operate in an economical and efficient manner;
• there must be good faith in abolishing redundant positions;
• there must be fair and reasonable criteria in selecting the employees to be terminated;
and
• there must be adequate proof of redundancy such as but not limited to the new staffing
pattern, feasibility studies, on the viability of the newly created positions, job description
and the approval by the management of the restructuring.
Retrenchment
• must be reasonably necessary and likely to
prevent business losses;
• the losses must not be de minimis but should
be substantial, serious, actual and real, or, if
expected to occur, reasonably imminent;
• the losses must be proved by sufficient and
convincing evidence;
• must be done in good faith and not to defeat
or circumvent the employees' right to security
of tenure;
• there must be fair and reasonable criteria in
ascertaining who would be dismissed and who
would be retained such as status, efficiency,
seniority, physical fitness, age, and financial
hardship for certain workers.

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 Closure
• there must be a
decision to close or
cease operation of
the enterprise by
the employer
• the decision was
made in good faith

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 Authorized Cause
Notice to the Authorized
employee and
to the DOLE 1
Causes
month before • Labor Saving
termination Device
1 month per year of • Redundancy
service or 1 month
whichever is higher Separation • Retrenchment
½ month per year of
Pay • Closure
service or 1 month
whichever is higher
 Disease
For disease to justify the termination of the employment
relationship, the following must be complied with:

• The employee must have a disease;

• The continued employment of the employee is prohibited by law or
prejudicial to her/his health of co-employees
• There must be certification by a competent public health authority
that the disease is incurable within a period of 6 months even with
proper medical treatment.

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• 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.
• Cases decided by the Supreme Court require compliance with the
two notice rule: (1) the notice to apprise the employee of the ground
for which his dismissal is sought; and (2) the notice informing the
employee of his dismissal, to be issued after the employee has been
given reasonable opportunity to answer and to be heard on his
defense. These rulings reinforce the State policy of protecting the
workers from being terminated without cause and without affording
them the opportunity to explain their side of the controversy.
• The employee must be 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.

Deoferio v Intel Technology Philippines, Inc. G.R. No. 202996, June

18, 2014.
Lagamayo v Cullinan Group, Inc. G.R. No.
227718, November 11, 2021
…constructive dismissal is defined as quitting or cessation of
work because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or
a diminution of pay and other benefits. It exists if an act of
clear discrimination, insensibility, or disdain by an employer
becomes so unbearable on the part of the employee that it
could foreclose any choice by him [or her] except to forego his
[or her] continued employment.
Lagamayo v Cullinan Group, Inc. G.R. No.
227718, November 11, 2021
Constructive dismissal exists as an involuntary resignation on the part
of the employee due to the harsh, hostile and unfavorable conditions
set by the employer. An act, to be considered as amounting to
constructive dismissal, must be a display of utter discrimination or
insensibility on the part of the employer so intense that it becomes
unbearable for the employee to continue with his [or her]
employment. By definition, constructive dismissal can happen in any
number of ways. At its core, however, is the gratuitous, unjustified, or
unwarranted nature of the employer's action. Constructive dismissal is
therefore a dismissal in disguise, or also known as constructive
discharge.
Lagamayo v Cullinan Group, Inc. G.R. No.
227718, November 11, 2021
The nature of constructive dismissal as a dismissal in disguise enables
the employers to do away with their obligation to prove just cause and
comply with the twin requirements of notice and hearing before
terminating their employees. Consequently, in the recent case of Jacob
v. First Step Manpower Int'l. Services, Inc., the Court held
that constructive dismissal is a form of illegal dismissal. Simply put,
constructive dismissal results in the employers' circumvention of the
due process requirements of the law in terminating an employee,
which effectively undermines their security of tenure.
Rule XXIII, Book V, IRR
• Section 8. Preventive suspension. — The employer may place the worker
concerned under preventive suspension if his continued employment
poses a serious and imminent threat to the life or property of the employer
or of his co-workers.
• Section 9. Period of suspension. — No preventive suspension shall last
longer than thirty (30) days. The employer shall thereafter reinstate the
worker in his former or in a substantially equivalent position or the
employer may extend the period of suspension provided that during the
period of extension, he pays the wages and other benefits due to the
worker. In such case, the worker shall not be bound to reimburse the
amount paid to him during the extension if the employer decides, after
completion of the hearing, to dismiss the worker.
 Employer may suspend operations for
a period not exceeding 6 months

Notice of suspension must be given to

Article 301: the DOLE

Suspension of
Employee does not receive pay during
Operations period of suspension of operations
unless leaves are applicable

After 6 months, the employee is

deemed terminated.
 Resignation
• Free and voluntary act by the employee to relinquish employment
• With 30 day notice, no need for cause
• Without notice - for cause
(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.
Italkarat 18 Inc v Gerasmio, G.R. No.
September 28, 2020
"if the fact of dismissal is disputed, it is the complainant who should
substantiate his claim for dismissal and the one burdened with the
responsibility of proving that he was dismissed from employment,
whether actually or constructively. Unless the fact of dismissal is
proven, the validity or legality thereof cannot even be an issue.
In the present case, the fact of the matter is that it was Juraldine
(employee) himself who resigned from his work, as shown by the
resignation letter he submitted and the quitclaim that he
acknowledged, and thus, he was never dismissed by the Company.”
Italkarat 18 Inc v Gerasmio, G.R. No.
September 28, 2020
“An act, to be considered as amounting to constructive dismissal, must
be a display of utter discrimination or insensibility on the part of the
employer so intense that it becomes unbearable for the employee to
continue with his employment.”
 Retirement
§ Collective Bargaining Agreement takes precedence.
§ Else, 60 to 65 years of age with at least 5 years of service
§ 22.5 days per year of service
Remedies
Prescriptive Periods

• ULP = 1 year
• Money claims = 3 years from accrual
• Offenses = 3 years
• Illegal Dismissal = 4 years
• Illegal Recruitment = 5 years
• Illegal Recruitment (Economic Sabotage) = 20 years
Reliefs in case of illegal
dismissal
 Reliefs in cases of Illegal Termination
Substantive Due Procedural Due DISMISSAL
Process Process is

VALID
✓ ✓
ILLEGAL
✗ ✗
ILLEGAL
✗ ✓
VALID but with damages
✓ ✗
 Reliefs in cases of Illegal Termination
q Reinstatement Article 294: An employee who is unjustly
dismissed from work shall be entitled to
q Full Backwages reinstatement without loss of seniority rights
q Damages and other privileges and to his full
backwages, inclusive of allowances, and to
q Attorney’s fees his other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him up to
the time of his actual reinstatement.
Labor Arbiter
Art 224.
1. Unfair labor practice (ULP) cases;
2. Termination disputes (or illegal dismissal cases);
3. If accompanied with a claim for reinstatement, those cases that workers may
file involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from
employer-employee relations;
5. Cases arising from any violation of Article 264 of the Labor Code, including
questions involving the legality of strikes and lockouts;
6. Except claims for employees compensation not included in the next succeeding
paragraph, social security, medicare and maternity benefits, all other claims arising
from employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding Five Thousand Pesos
(P5,000.00), whether or not accompanied with a claim for reinstatement;
Art 224.
7. Wage distortion disputes in unorganized establishments not voluntarily
settled by the parties pursuant to Republic Act No. 6727;
8. Enforcement of compromise agreements when there is non-compliance
by any of the parties pursuant to Article 233 of the Labor Code, as amended;
9. Money claims arising out of employer-employee relationship or by virtue
of any law or contract, involving Filipino workers for overseas employment,
including claims for actual, moral, exemplary and other forms of damages as
provided by Section 10 of R.A. No. 8042, as amended by R.A. No. 10022;
[Link] cases under the exception clause of Article 128(b) of the Labor
Code, as amended by R.A. 7730
National Labor Relations Commission (NLRC)
“Technical rules of procedure do not strictly apply in labor proceedings.
"[P]etitioners could present evidence for the first time on appeal to the
NLRC. It is well settled that the NLRC is not precluded from receiving
evidence, even for the first time on appeal, because technical rules of
procedure are not binding in labor cases.”

Spouses Florentino R. Maynes, Sr. v Oreiro, G.R. No. November 25,

2020 Hernando, J.)
Article 129 - Regional Office
• Simple money claims (Art 129) – any matter involving the recovery of
wages and other monetary claims and benefits, including legal
interest, owing to an employee or person employed in domestic or
household service or househelper under – does not include a claim
for reinstatement and the aggregate money claims of each employee
or househelper does not exceed Five thousand pesos (P5,000.00).
Pedring and Denise were employees of Delibakery
who resigned from their jobs but wanted to file
money claims for unpaid wages and 13th month
pay. Pedring’s claim totals P20,000.00 while
Denise’s claim totals P3,000.00. Denise changed
her mind and now also wants reinstatement
because she resigned only upon the instigation of
her manager. Where should Pedring and Denise
each file their claims? Explain fully.
Pedring and Denise should file their claims with
the Labor Arbiter. Under the law, Pedring’s claim
is within the jurisdiction of the Labor Arbiter
because it it exceeds P5,000.00. Denise’s claim is
also within the jurisdiction of the Labor Arbiter
because she decided to claim reinstatement.
Under the law, claims for reinstatement are
within the jurisdiction of the Labor Arbiter
regardless of the accompanying monetary claim.
Voluntary Arbitration
• Grievance Machinery - interpretation or implementation of collective
bargaining agreements and those arising from the interpretation or
enforcement of company personnel policies.
• Voluntary Arbitrator
• Parties have 10 days to file Motion for Reconsideration.
• Resolution of the MR leaves parties with 15 days to file Rule 43 with CA
• Guagua National Colleges v CA, GR. No. 188291, August 28, 2018
• CA – R 43
• SC – R 45
Inspection
• A 128 : Representatives of the SOLE inspect, investigate any fact,
condition or matter which may be necessary to determine violations
or which may aid in the enforcement of this Code and of any labor
law, wage order or rules and regulations
• SOLE or representative issues compliance orders
• If representative issued it, appeal may be made to SOLE
• CA (R 65)
• SC (R 45)
• On the basis of a complaint, the DOLE inspected the ABC Radio Inc
and found several violations. ABC immediately said that the
complainant is not its employee but is a drama talent. Is it proper for
the DOLE to continue to resolve the complaint?
• Yes, the SC has held that the DOLE has the authority to determine the
existence of employer-employee relation in the exercise of its
visitorial power under Article 128 of the Labor Code. In this case, if it
is found that there is an employer-employee relation, then the
complaint may be resolved by the DOLE.

PEOPLE’S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), v

SOLE G.R. No. 179652 March 6, 2012
 SENA SENA
National
Labor Regional Grievance
Conciliation
Arbiter Office Machinery Mediation Board

NLRC Office of the Voluntary

Commission Secretary Arbitration

Court of Appeals

Supreme Court