SECURITY OF TENURE - The right of a worker to be the employees truly intended to resign from their respective

secured or to continue in employment until the same is posts, we cannot merely rely on the tenor of the resignation
terminated by virtue of a valid, just cause or grounds letters but must take into consideration the TOTALITY
authorized by law. OF CIRCUMSTANCES IN EACH PARTICULAR
CASE.
GUIDING PRINCIPLE OF SECURITY OF TENURE.
The law and jurisprudence guarantee every employee the SEPARATION PAY GENERAL RULE: An employee
security of tenure on his employment. This commitment to who voluntarily resigns is NOT entitled to separation pay.
the cause and welfare of the working class proceeds from EXCEPTIONS: (1) Sanctioned by established company
the social justice principles of the Constitution and the policies; or, (2) Stipulated in the employment contract or
Court zealously implements out of its concern for those CBA.
with less in life.
CONSTRUCTIVE DISMISSAL/INVOLUNTARY
LIMITATION. The employee’s right to security of tenure RESIGNATION - Involuntary resignation brought about
does not give him such a vested right in his position as by the harsh, hostile, and unfavorable condition set by the
would deprive the company of its prerogative to change his employer. It is an act amounting to dismissal but made to
assignment or transfer him where he will be most useful, appear as if it were not. A dismissal in disguise.
and where his transfer is not unreasonable nor inconvenient
nor prejudicial to him, and it does not involve a demotion GROUNDS. i. SERIOUS INSULT. To treat with
in rank or diminution of his salaries. insolence, indignity or contempt by word or action. Insult
implies malice or denotes “ill-will” or an intent to injure or
TERMINATION - A term use to denote dismissal or lay- to offend or to wound the feelings of another. ii.
off. Dismissal is a form of ending EM-EM relationship INHUMAN OR UNBEARABLE TREATMENT. The
initiated either by the employer or the employee such as in conduct of the employer is marked with cruelty. iii.
the case of just or authorized causes. COMMISSION OF A CRIME OR OFFENSE. By the
employer or his representatives against the person of the
ILLEGAL DISMISSAL. a. REMEDY. The only remedy employee or any of the immediate members of his family.
to an employee who is illegally dismissed is to file a iv. ANALOGOUS CAUSES. d. RELIEF. Separation pay
complaint for illegal dismissal with the Labor Arbiter. b. is the appropriate relief. No reinstatement.
NOT A CRIMINAL OFFENSE. Illegal Dismissal is not
an offense within the contemplation of Art. 303 of the ABANDONMENT OF
Labor Code despite the fact that it is a violation of the EMPLOYMENT/CONSTRUCTIVE RESIGNATION -
Labor Code. The reason is because illegal dismissal is not The deliberate, unjustified refusal of an employee to
among those which the Labor Code expressly declares to resume his work. It is a form of neglect of duty; hence, a
be unlawful or penal in nature. (Callanta v. Carnation, 145 just cause for termination of employment by the employer.
SCRA 268)
REQUISITES. For a valid finding of abandonment, two
PRESCRIPTIVE PERIOD – complaint with (2) factors should be present: i. The failure to report for
reinstatement 4 years. If only separation pay it becomes work or absence without valid or justifiable reason; and, ii.
money claims, then 3 years. A clear intention to sever EM-EM relationship. NB: The
intent to discontinue the employment must be shown by
What is the distinction between JUSTCAUSES and CLEAR PROOF that it was deliberate and unjustified.
AUTHORIZEDCAUSES? A dismissal based on a just
cause means that the employee has committed a wrongful DOUBLE NOTICE RULE. To establish abandonment of
act or omission; while a dismissal based on an authorized employment, the following rules should be followed: i. A
cause means that there exists a ground which the law itself notice to report for work should be sent to the last known
allows or authorizes to be invoked to justify the termination address of the employee; ii. If the employee does not
of an employee even if he has not committed any wrongful report, it would be prudent to send a second notice to report
act or omission, such as installation of labor-saving for work; iii. If the employee does not report for work
devices, redundancy, retrenchment, closure or cessation of despite receipt of notices, it would already indicate intent to
business operations or disease. abandon; iv. If the employee reports for work as directed
and he signifies his intention to continue working, then he
TERMINATION OF EMPLOYMENT RELATIONS should be charged with AWOL and the corresponding
BY EMPLOYEE penalty should be meted out against him.

The voluntary act of an employee who finds himself in a TERMINATION OF EMPLOYMENT RELATIONS
situation where he believes that personal reasons cannot be BY EMPLOYER
sacrificed in favor of the exigency of services, then he has
no other choice but to disassociate himself from his JUST CAUSES FOR DISMISSAL (Art. 297, LC)
employment. (Mendoza v. HMS Credit Corp, et. Al., GR
No. 187232, April 17, 2013) Requisites of Serious Misconduct: (a) There must be
misconduct; (b) The misconduct must be of such grave and
REQUISITES. i. It must be unconditional; ii. There must aggravated character; (c) It must relate to the performance
be an intent to relinquish; and, iii. There must be an actual of the employee’s duties; and, (d) There must be showing
act of relinquishment. NB: In order to withstand the test of that the employee becomes unfit to continue working for
validity, resignations must be made voluntarily and with the employer. (Sec. 5.2 {a} Department Order No. 147-15,
the intention of relinquishing the office, coupled with an act Series of 2015)
of relinquishment. Therefore, in order to determine whether
 Requisites for Willful Disobedience: (a) There must be evidence; or, d. The court orders the acquittal of the
disobedience or insubordination; (b) The disobedience or employee.
insubordination must be willful or intentional in character
by a wrongful and perverse attitude; (c) The order violated FFECT OF SUBSEQUENT CONVICTION ON THE
must be reasonable, lawful, and made known to the FINAL JUDGMENT DECLARING THE DISMISSAL
employee; and, (d) The order must pertain to the duties ILLEGAL. The subsequent conviction of an employee in
which he has been engaged to discharge. (Sec. 5.2 {b}, the criminal case (for the offense that resulted in his
Department Order No. 147-15, Series of 2015) dismissal) will NULLIFY the final decision declaring the
Requisites of Gross and Habitual Neglect: (a) There must dismissal illegal. The conviction of the employee in the
be neglect of duty; and, (b) The negligence must be both criminal case in effect AFFIRMED the existence of a valid
gross and habitual in character. (Sec. 5.2 {c}, Department ground for dismissal, thereby removing the justification for
Order No. 147-15, Series of 2015) the administrative decision declaring the dismissal unjust
and illegal.
Requisites for fraud or willful breach of trust: (a) There
must be an act, omission, or concealment; (b) The act, Requisites of analogous causes: (a) There must be an act
omission, or concealment involves a breach of legal duty, or omission similar to those specified just causes; and, (b)
trust, or confidence justly reposed; (c) It must be committed The act or omission must be voluntary and/or willful on the
against the employer or his/her representative; and, (d) It part of the employee. No act or omission shall be
must be in connection with the employee’s work. (Sec. 5.2 considered as analogous cause unless expressly specified in
{d}, Department Order No. 147-15, Series of 2015) the company rules and regulations or policies.
Requisites of loss of confidence: (a) There must be an act,
omission, or concealment; (b) The act, omission, or SEPARATION PAY. The employee whose employment
concealment justifies the loss of trust and confidence of the is terminated by reason of just cause is NOT ENTITLED
employer to the employee; (c) The employee concerned to separation pay EXCEPT as expressly provided for in (a)
must be holding a position of trust and confidence; (d) The the company policy of (b) CBA.
loss of trust and confidence should not be simulated; and
(e) It must be genuine and not a mere afterthought to justify THE “TOTALITY RULE” or “TOTALITY OF
and earlier action taken in bad faith. (Sec. 5.2 {e}, INFRACTION RULE”. The totality of infractions or
Department Order No. 147-15, Series of 2015) number of violations committed during the period of
employment shall be considered in determining the penalty
DISTINCTION IN THE TREATMENT OF to be imposed on the erring employee. The offenses
MANAGERIAL EMPLOYEES VIS-À-VIS THE committed by him should not be taken singly and
RANK-AND-FILE PERSONNEL IN THE separately but in their totality. Fitness for continued
APPLICATION OF THE LOSS OF TRUST AND employment cannot be compartmentalized into tight little
CONFIDENCE DOCTRINE. With respect to rank-and- cubicles of aspects of character, conduct and ability
file personnel, loss of trust and confidence as ground for separate and independent of each other. (Alvarez v. Golden
valid dismissal requires proof of involvement in the alleged Tri Bloc, Inc., GR No. 202158, September 25, 2013)
events in question, and that mere uncorroborated assertion
and accusations by the employer will not be sufficient. But AUTHORIZED CAUSES FOR DISMISSAL (Art. 298
as regards a managerial employee, the mere existence of a & 299, LC)
basis for believing that such employee has breached the INSTALLATION OF LABOR-SAVING DEVICES
trust of his employer would 5 suffice for his dismissal. (AUTOMATION) Requisites: (a) There must be
Hence, in the case of managerial employees, proof beyond introduction of machinery, equipment, or other devices; (b)
reasonable doubt is not required, it being sufficient that The introduction must be done in good faith; (c) The
there is some basis for such loss of confidence, such as purpose of such introduction must be valid such as to save
when the employer has reasonable ground to believe that cost, enhance efficiency and other justifiable economic
the employee concerned is responsible for the purported reasons; (d) There is no other option available to the
misconduct, and the nature of his participation renders him employer than the introduction of machinery, equipment, or
unworthy of the trust and confidence demanded by his device and the consequent termination of employment of
position. (Mendoza v. HMS Credit Corp. et. Al., GR No. those affected thereby; and, (e) There must be fair and
187232, April 17, 2013.) reasonable criteria in selecting employees to be terminated.
(Sec. 5.4 {a}, Department Order No. 147-15, Series of
Requisites of commission of a crime or offense: (a) There 2015.)
must be an act or omission punishable/prohibited by law; Rule on Separation Pay: An employee terminated due to
and (b) The act or omission was committed by the installation of laborsaving device shall be paid by the
employee against the person of his employer or any employer a separation pay equivalent to at least one (1)
immediate member of his family or his duly authorized month pay or at least one (1) month pay for every year of
representative. (Sec. 5.2 {f}, Department Order No. 147- service, whichever is higher, a fraction of six (6) months
15, Series of 2015) NB: Prior conviction is NOT service is considered as one (1) whole year. (Sec. 5.5 [2nd
REQUIRED – mere commission of a crime or offense. par.], Department Order No. 147-15, Series of 2015) ii.
EFFECT OF ACQUITTAL OR CONVICTION. The REDUNDANCY. Exists where the services of an
right of an employer to dismiss an erring employee is NOT employee are in excess of what is reasonably demanded by
DEPENDENT upon the verdict of guilt or innocence in a the actual requirement of the enterprise. Employer has no
criminal case. An employer can proceed with the dismissal legal obligation to keep in its payroll more employees than
of an employee: a. Even if the employee was not criminally are necessary for the operation of its business. Requisites:
prosecuted; or, b. The criminal case was dropped; or, c. The (a) There must be superfluous positions or services of
prosecutor dismisses the complaint for insufficiency of employees; (b) 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 law or prejudicial to his/her health as well as to the health
manner; (c) There must be good faith in abolishing of his/her co-employees; and (c) There must be a
redundant positions; (d) There must be fair and reasonable certification by a competent public health authority that the
criteria in selecting the employees to be terminated; and (e) disease is incurable within a period of six (6) months even
There must be an adequate proof of redundancy such as but with proper medical treatment. (Sec. 5.4 {e}, Department
not limited to the new staffing pattern, feasibility Order No. 147-15, Series of 2015) b. Rule on Separation
studies/proposals, on the viability of the newly created Pay: An employee terminated due to disease shall be paid
positions, job descriptions and the approval by the by the employer a separation pay equivalent to one (1)
management of the restructuring. (Sec. 5.4 {b}, Department month salary or at least one-half (1/2) month salary for
Order No. 147-15, Series of 2015) Rule on Separation every year of service, whichever is higher, a fraction of six
Pay: An employee terminated due to redundancy shall be (6) months service is considered one (1) whole year. (Sec.
paid by the employer a separation pay equivalent to at least 5.5 [5th par.], Department Order No. 147-15, Series of
one (1) month pay or at least one (1) month pay for every 2015)
year of service, whichever is higher, a fraction of six (6)
months service is considered as one (1) whole year. (Sec. EFFECT OF DISMISSAL WITHOUT DUE PROCESS
5.5 [2nd par.], Department Order No. 147-15, Series of (BELATED DUE PROCESS RULE). Where the
2015) RETRENCHMENT (DOWNSIZING). Reduction dismissal is valid, the lack of statutory due process does not
of personnel usually due to poor financial returns so as to nullify the dismissal or render illegal, much less ineffectual.
cut down on costs of operations in terms of salaries and However, the employer should be held liable for
wages to prevent bankruptcy of the company. Requisites: NOMINAL DAMAGES, the amount of which is addressed
(a) The retrenchment must be reasonably necessary and to the sound discretion of the court and should depend on
likely to prevent business losses; (b) The losses, if already the facts of each case. (Agabon v. NLRC, November 17,
incurred, are not merely de minimis, but substantial, 2004)
serious, actual and real, or if only expected, are reasonably
imminent; (c) The expected or actual losses must be proved FACTORS TO CONSIDER IN FIXING THE
by sufficient and convincing evidence; (d) The AMOUNT OF NOMINAL DAMAGES: (a) The
retrenchment must be in good faith for the advancement of employer’s financial, medical, and/or moral assistance to
its interest and not to defeat or circumvent the employee’s the sick employee; (b) The flexibility and leeway that the
right to security of tenure; and (e) There must be fair and employer allowed the sick employee in performing his
reasonable criteria in ascertainment who would be duties while attending to his medical need; (c) The
dismissed and who would be retained among the employer’s grant of other termination benefits in favor of
employees, such as status, efficiency, seniority, physical the employee; and, (d) Whether there was a bona fide
fitness, age, and financial hardship for certain workers. attempt on the part of the employer to comply with the
(Sec. 5.4 {c}, Department Order No. 147-15, Series of twin-notice requirement as opposed to giving no notice at
2015). Rule on Separation Pay: An employee terminated all. (Deoferio v. Intel Technology Phil., Inc., GR No.
due to retrenchment shall be paid by the employer a 202996, June 18, 2014)
separation pay equivalent to one (1) month pay or at least
one-half (1/2) month pay for every year of service, RELIEFS AVAILABLE TO ILLEGALLY
whichever is higher, a fraction of six (6) months service is DISMISSED EMPLOYEES A. FOR LOCALLY
considered as one 91) whole year. (Sec. 5.5 [3rd par.], EMPLOYED EMPLOYEES:
Department Order No. 147-15, Series of 2015) iv.
CLOSURE OR CESSATION OF OPERATION. The REINSTATEMENT TO HIS FORMER POSITION
reversal of fortune of the employer whereby there is a WITHOUT LOSS OF SENIORITY RIGHTS
complete cessation of business operations and/or actual “REINSTATEMENT” – the restoration to a state or
locking up of the doors of the establishment usually due to condition which one had been removed or separated. One
financial losses. Closure of cessation of operations may be who is reinstated assumes the position he had occupied
complete or partial. It is carried out to either stave off the prior to the dismissal and is, as an ordinary rule, entitled
financial ruin or promote the business interest of the only to the last salary in that position
employer. Requisites: (a) There must be a decision to close TWO (2) TYPES OF REINSTATEMENT: (a) Actual
or cease operation of the enterprise by the management; (b) reinstatement; and, (b) Payroll reinstatement.
The decision was made in good faith; and, (c) There is no
other option available to the employer except to close or CIRCUMSTANCES THAT WILL BAR
cease operations. (Sec. 5.4 {d}, Department Order No. 147- REINSTATEMENT. Reinstatement cannot be ordered
15, Series of 2015). Rule on Separation Pay: An employee when supervening events (during the pendency of the
terminated due to closure or cessation of business operation complaint for illegal dismissal) render restoration of the
not due to serious business losses shall be paid by the employee’s employment impossible, unfeasible, unjust, or
employer a separation pay equivalent to one (1) month pay inequitable, such as: (a) Transfer of business to an innocent
or at least onehalf (1/2) month pay for every year of transferee – labor contracts being “in personam”, should
service, whichever is higher, a fraction of six (6) months not affect a transferee in good faith. (b) Business reverses;
service is considered as one (1) whole year. When the (c) Abolition of the position – corporate restructuring; (d)
closure is due to serious business losses or financial Closure of business;10 (e) Incapacity of the employer; (f)
reverses. NO SEPARATION PAY is required. (Sec. 5.5 Attainment of the retirement age; (g) Physical incapacity of
[4th par.], Department Order No. 147-15, Series of 2015) the employee; (h) Reinstatement is not conducive to
industrial harmony; (i) Over-aged employee; and, (j)
DISEASE AS AN AUTHORIZED CAUSE OF DOCTRINE OF STRAINED RELATIONS o If the
DISMISSAL (Art. 299, LC) a. Requisites: (a) The reinstatement of the employee would only exacerbate the
employee must be suffering from any disease; (b) The tension and strained relations between the parties, or where
continued employment of the employee is prohibited by the relationship between the employer and the employee
has been unduly strained by reason of their irreconcilable The concept of floating status or temporary off-detail has
differences, it would be more prudent to order payment of been defined as that period of time when an employee is in
separation pay instead of reinstatement. o It is not practical between assignments or when they are made to wait after
anymore to reinstate an employee who is no longer being relieved from a previous post until they are
welcome in the company. o If the dismissal of an employee transferred to a new one.
is adjudged to be illegal, SEPARATION PAY may be
awarded as an ALTERNATIVE to reinstatement. CONCEPT OF FLOATING STATUS OR
SEPARATION PAY is equivalent to at least one (1) TEMPORARY OFF-DETAIL OF AN EMPLOYEE.
month salary or one (1) month salary for every year of The concept of floating status or temporary off-detail has
service, whichever is higher. A fraction of at least six (6) been defined as that period of time when an employee is in
months is considered as one (1) whole year. between assignments or when they are made to wait after
PAYMENT OF BACKWAGES being relieved from a previous post until they are
transferred to a new one.
WHEN TO AWARD FULL BACKWAGES: (a) If the
employee was dismissed without any cause whatsoever;
and, (b) If the employee was dismissed on grounds
specifically prohibited by law. (Art. 118 [Retaliatory
Measures]; Art. 135 [Prohibited Acts]; Art. 259 [ULP]; and
Art. 301 [When employment not deemed terminated.])

WHEN TO AWARD LIMITED BACKWAGES: (a) If

the employee has in fact committed an offense but the
penalty of dismissal is not commensurate to the offense
committed; or, (b) If there is delay in the filing of the
complaint for illegal dismissal.

WHEN BACKWAGES MAY NOT BE AWARDED

(Instances where the employee was reinstated) (a) If the
employer acted in good faith in terminating the employee;
(b) If the cessation of the employment was brought about
neither by dismissal nor abandonment (e.g., economic
losses); or, (c) If the cessation of employment was due to
the employee’s refusal to work.

DETERMINATION OF THE AMOUNT OF

BACKWAGES: “The back wages to be awarded to an
illegally dismissed employee should not, as a general rule,
be diminished or reduced by the earning derived by him
elsewhere during the period of his illegal dismissal.”
(Bustamante v. NLRC, 265 SCRA 1996) Also known as
the “Bustamante Doctrine”.

THE “NO REFUND RULE” – In case of reversal of the

award of reinstatement on appeal, the employee is not
required to reimburse the salary he received even if he did
not render service during the period (Garcia v. PAL, GR
No. 164856, January 20, 2009.)

FOR MIGRANT OR OVERSEAS WORKERS i. Sec.

10, RA 8042 (Migrant Workers and Overseas Filipino Act
of 1995), an illegal dismissed OFW is entitled to: (a)
Reimbursement of his placement fee plus 12% per annum;
and, (b) Salaries for the unexpired portion of his/her
employment contract.

PREVENTIVE SUSPENSION a. CONCEPT. A

measure allowed by law and afforded to the employer if an
employee’s continued employment poses a serious and
imminent threat to the employer’s life or property of or his
co-workers. It may be legally imposed against an employee
whose alleged violation is subject of an investigation.
(Bluer than Blue Joint Ventures Company v. Esteban, GR
No. 192582, April 7, 2014)

WHEN EMPLOYMENT NOT DEEMED

TERMINATED (Art. 301, LC)
CONCEPT OF FLOATING STATUS OR
TEMPORARY OFF-DETAIL OF AN EMPLOYEE.