B3. Security of Tenure

Blog 3.
Security of Tenure
04 July 2020
Every employee shall be assured security of tenure. No employee can be

dismissed from work except for a just or authorized cause, and only after due process.
Art. 294 Security of Tenure. In cases of regular employment, the employer shall
not terminate the services of an employee except for a just cause or when authorized
by this Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement. (PD No. 422, as amended and renumbered per DOLE
Department Advisory No. 1, Series of 2015)
Purpose of the law

The security of tenure clause aims to protect the employee against arbitrary,
oppressive and unceremonious dismissal of his job. Every job provides food on the
table, a house to live in or education for the children of every employee. Hence, if not
protected, an employee may not able to provide a decent way of living for his family.
Employment can be assumed as a property right and not merely a contractual
relationship. It is for this reason that the State has taken up measures to protect
employees from unjustified dismissals because the right to security of tenure is not only
a statutory right but, more so, a constitutional right.
What is security of tenure?

First sentence of Art. 294 provides that in cases of regular employment, the
employer shall not terminate the services of an employee except for a just cause or
when authorized by this Title.
This means that no employee can be dismissed from work except for a just or
authorized cause, and only after due process. This security of tenure applies to all
employees regardless of employment status. If an employee was terminated from his
employment by his employer without a just or authorized caused, he is considered as
illegally dismissed.
Moreover, security of tenure also protects workers from unwarranted and
unconsented demotion and transfer. Thus, while due process required by law is applied
on dismissals, the same is also applicable to demotions, as demotions likewise affect
the employment of a worker whose right to continued employment, under the same
terms and conditions, is also protected by law. Moreover, considering that demotion is,
like dismissal, also a punitive action, the employee demoted should as in cases of
dismissals, be given chance to contest the same (Jarcia Machine Shop and Auto
Supply vs. NLRC, G.R. No. 118045, 2 January 1994).
Limitation of security of tenure clause

While security of tenure is a constitutionally guaranteed right of the employee, it
does not, however, mean perpetual employment for the employee. This right does not
give the employee such vested right in his position as would deprive the company of its
prerogative to change his assignment or transfer him where he will be most useful.
Blog 3. Security of Tenure
04 July 2020
More importantly, it is an employer’s prerogative to terminate an employee especially

when there is a just cause therefore.
What happens if an employee is unjustly dismissed?

Second sentence of Art 294 provides that an employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement.
Reinstatement is separate and distinct from backwages. The former restores the
illegally dismissed employee to his previous status prior to his removal while the latter is
a form of relief that restores the income that was lost by reason of the unlawful
dismissal. In other words, the award of one is not a condition precedent to an award of
another.
Reinstatement
It is a kind of relief granted to an illegally dismissed employee. Reinstatement
restores the employee who was unjustly dismissed to the position from which he was
removed, i.e., to his status quo ante dismissal.
The right to reinstatement cannot be nullified by an employee’s employment
elsewhere. So that even if a dismissed employee work overseas does not constitute a
waiver of his right to reinstatement because it was done to minimize damages resulting
from unjustified dismissal. It is, however, different if the employee unreasonably refuses
to report for work with the former employer after reinstatement has been ordered or
after the employer has offered to reinstate said employee that the right is considered as
renounced.
Separation pay in lieu of reinstatement

Separation pay may be awarded to the employees where reinstatement is no
longer possible such as when the establishment has closed or ceased operations at the
time the workers should be reinstated or the position to which the employee should be
reinstated no longer exists for reasons not attributable to the fault of the employee
(RCPI, Inc. vs. NLRC, G.R. Nos. 101181-84, 22 June 1992).
Separation pay awarded in lieu of reinstatement shall be equivalent to at least 1
month pay for every year of service (Ibid.).
Separation pay as a measure of social justice

Separation pay may be allowed in instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral
character (Gustillo vs. Wyeth Phils., Inc., G.R. No. 149629, 4 October 2004). Those who
invoke social justice may do only if their hands are clean and their motives blameless
(Ibid.)
Without loss of seniority rights

04 July 2020
The phrase reinstatement without loss of seniority rights means that benefits due
to an illegally dismissed employee including seniority rights and other privileges will not
be affected by his absence due to the pendency of the illegal dismissal case.
Note that seniority right is not constitutional but rather contractual. It is acquired
through long-time employment.
Backwages
A form of relief that restores the income of the employee that was lost by reason
of the unlawful dismissal. In an illegal dismissal case, backwages is not the principal
cause of action but it is the unlawful deprivation of one’s employment violative of the
constitutional right to security of tenure.
The award of backwages is not private compensation or damages but it is in
furtherance and effectuations of the public objectives of the Labor Code. The award is
not in redress of private right but in the nature of a command upon the employer to
make public reparation for his violation of the Labor Code (Imperial Textile Mills, Inc. vs.
NLRC, G.R. No. 108284, 30 June 1993).
Full backwages
Simply means as one that is not diminished or reduced by the earnings derived
by the employee elsewhere during the period of his illegal dismissal (Buenvije vs. CA,
G.R. No. 147806, 12 November 2002).
Period covered by full backwages

Full backwages shall be awarded to cover the period from date of illegal
dismissal to the employer’s date of actual reinstatement (Panday vs. NLRC, G.R. No.
67664, 20 May 1992). If reinstatement is no longer possible, the backwages shall be
computed from the time of illegal termination up to the finality of the decision (Phil.
Journalists, Inc. vs. Mosqueda, G.R. No. 141430, 7 May 2004)
Concept of Damages
Damages was defined by the Supreme Court in the case of MEA Builders, Inc. v.
Court of Appeals, G.R. No. 121484, 31 January 2005), as the sum of money which the
law awards or imposes as a pecuniary compensation, a recompense, or satisfaction for
an injury done or a wrong sustained as a consequence either of a breach of a
contractual obligation or a tortious act.
Liability for moral and exemplary damages and nominal damages

Moral and exemplary damages are recoverable only where the dismissal of an
employee was attended by bad faith or fraud, or constituted an act oppressive to labor,
or was done in a manner contrary to morals, good customs or public policy. The person
claiming moral damages must prove the existence of bad faith by clear and convincing
evidence for the law always presumes good faith.
Nominal damages may be awarded to a plaintiff whose right has been violated or
invaded by the defendant, for the purpose of vindicating or recognizing that right, and
not for indemnifying the plaintiff for any loss suffered by him. Its award is thus not for the
purpose of indemnification for a loss but for the recognition and vindication of a right.
04 July 2020
Petitioner's violation of respondent's right to statutory procedural due process warrants

the payment of indemnity in the form of nominal damages (Allied Banking Corp. vs.
Calumpang, G.R. No. 219435, 17 January 2018).
References:
 Poquiz, S.A., Labor Relations Law With Notes And Comments, 2006 Edition.
 PD No. 422, as amended and renumbered per DOLE Department Advisory No. 1,
Series of 2015.
 Supreme Court decided cases.

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Blog 3.

Every employee shall be assured security of tenure. No employee can be

Purpose of the law

What is security of tenure?

Limitation of security of tenure clause

More importantly, it is an employer’s prerogative to terminate an employee especially

What happens if an employee is unjustly dismissed?

Separation pay in lieu of reinstatement

Separation pay as a measure of social justice

Without loss of seniority rights

Period covered by full backwages

Liability for moral and exemplary damages and nominal damages

Petitioner's violation of respondent's right to statutory procedural due process warrants

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