Chapter 10- Security of Tenure(p457)

Security of Tenure- Er cannot dismiss an Ee without just cause/ authorized cause (Art. 294, LC)
- also works against other personnels which force an Ee to give up his employment without valid
reason.
- protects Ees with regular employment (Art 294, LC)

Just cause Authorized cause

Employment is terminated because Ee is at Employment is terminated because of

fault/ guilty of infraction against Er (Art 297, economic reasons (Art. 298, 299, LC)
LC)

obliges the Er to give the Ee opportunity to requires a written notice of termination,

explain his side before dismissing. served one month in advance to the Ee and
to DOLE

Does not entitle the Ee to any relief Entitles Ee to separation pay

For those holding non-regular employment:

1) Project, seasonal, fixed term ees -cannot be dismissed without valid cause prior to the
expiration of the term of their employment.
2) Probationary Ees- can be dismissed only for valid causes or failure to qualify for regular
employment
3) Casual employees- who rendered at least one year of service (whether continuous or broken)
cannot be dismissed without valid or authorized cause as long as the activity in which they were
engaged still exists.

Rank-and-file Ees- may be dismissed for loss of trust and confidence

Managerial Ees- mere existence of some basis or reasonable ground to believe that they are
responsible for misconduct will suffice for their dismissal

Illegal Dismissal (p460)

Dismissal of Ees may be illegal because:

1) The dismissal is prohibited by law

2) Dismissal is without just cause
3) The penalty of dismissal is not commensurate to the offense committed
4) Ee was forced to quit because he was subjected to serious insult or inhuman and unbearable
treatment. (Constructive dismissal)

I. Dismissals that are prohibited by law:

1) Dismissal of an Ee who has filed a complaint for violation of the minimum wage law (Art 118,
LC)
2) Dismissal of a female Ee because of marriage (Art 134, LC)
3) Dismissal of female Ees for purpose of preventing her from enjoying any of the benefits
provided under the Labor Code (Art, 135, LC)
4) Dismissal of a female Ee because of pregnancy (Art 135, LC)
5) DIsmissal amounting to unfair labor practice (Art 259, LC)

Disproportionate dismissal (p462)

- minor/ unimportant infractions that do not warrant a dismissal

Illegal dismissal- not a criminal offense; except those provided for in the Labor Code as
unlawful.(Art 303, LC)

The ff are unlawful, and considered as a criminal offense:

1) Dismissal of an Ee who has filed a complaint, testified or is about to testify in a complaint for
recovery of unapid wages
2) Dismissal of a woman-Ee by reason of marriage
3) Dismissal of a woman- Ee because of her pregnancy
4) Dismissal of an Ee who has testified or is about t give testimony in a case pertaining to the
exercise of right to self-organization

Prescrptive period for action for illegal dismissal-

1) Complaint for reinstatement- 4 years (Art 1146, CC)

2) Separation pay w/o reinstatement- 3 years (Art 36, LC)

Reckoning of presciptive period- from date of dismissal, not acquittal

Remedy for Illegal Dismissal (p465) - file a complaint before NLRC, not Injunction (not a cuasr of
action. It is merely a provisional remedy)

Reliefs for Illegal Dismissal:

1) OFW: Reimbursement of his placement fee with 12% inerest per annum and salaries for
unexpired portion of his contract
2) For locally Employed workers: Reinstatement or Backwages or Separation pay
Additional: Moral and exemplary damages and attorneys fees:

Reinstatament (Art 294, LC)

- refers to restoration of illegally dismissed Ee to the position from which he was removed.
- an Ee cannot be ordered reinstated to a position which he never occupied
-only for those illegally or unjustly dismissed from work

Circumstances that will bar reinstatement:

*Transfer of Business ownership

*Due to business reverses
*Closure of business
*Abolition of position
* Attainment of compulsory age of retirement
*Ee's incapacity
*Conviction in a criminal case
*strained relations

Doctrine of Strained Relations (p470)

-reinstatement of an Ee found to be illegally dismissed should not be ordered anymore to spare

the Ee from agony of aving to work anew with his employer under an atmosphere of anipathy
and antagonism
- should not be applied indiscriminately
- if differences between Er and Ee are not personal not serious, it should not be applied

If reinstatement not possible anymore: Separation pay. May be awarded:

1) Position occupied by teh dismissed no longer exists

2) Estblishment has closed down
3) Er reduced personnel
4) Business ownership has been transfered/sold
5) Ee has become physically/emntally incapacitated
6) Relationship of Er and Ee has been severely strained
7) Ee has reached retirement age
8) Ee has been convicted of a crime

Amount of separation pay: Atleast one month salary/One month salary for every year of
service, whichever is higher
GR: Ee dismissed for a just cause is not entitled to separation pay
E: May be awarded as a measure of social justice (i.e ppor performance, financial assistance)

Backwages (p473)

- relief that restores the income that was lost by reason of illegal dismissal
-not cause of action; relief
-computed from the time his compensation was withheld upto the time of his actual
reinstatement (Art 294, LC) - however, this is NOT automatic.
LC, NLRC and courts have discretion to determine how much backwages should be awarded

Backwages Unpaid wages

refer to compensation which an Ee would compensation for services already rendered

have earned has not the dismissal but withheld by Er

When to award full backwages:

1) Ee was dismissed on groudns specifically prohibited by law:

Arts 118, 135, 259 (f) and 301 of the Labor Code

2) Ee was dismissed without nay reason

When to award limtied backwages:

1) Dismissal does not commensurate to the offense committed

2) Delay in filing of complaitn for Illegal Dismissal

When backwages may not be awarded:

1)Er was in good faith in dismissing Ee

2) Ee's refusal to work
3) Cessation of employment

Computation of backwages (p479)

Reinstatement + Full backwages= From time of dismissal to Ee's reinstatement

Separation pay + Full backwages= Time of dismissal to Finality of the decision
Reinstatement but could not be reinforced (due to supervening events)= time of dismissal up to
time when reinstatement has been rendered impossible
Backwages of probationary dismissed Ee= time of dismissal to expiration of probationary
employment
Backwages of irregular workers= What workers ( piece-rate, seasonal workers) would usually
earn had they not been dismissed

Can Separation pay and Backwages be awarded simultaneously? YES. The purpose of the
reliefs are different.

Backwages= Restore income that was lost by reason of unjust dismissal

Separation pay= provide money to Ee during the period when he needs to look for another job

The ff will forestall the running of backwages: (p481)

*Death
*Physical or Mental Incapacity
*Permanent closure of the establishment
*Temporary closure of estblishment
*Confinement in prison
*Attains retirement age

Relief of: (p482)

*Moral Damages= Must be supported by proof that the dismissal was attended by bad faith,
fraud or constituted an act contrary to morals, good customs or public policy and that social
humiliation, wounded feelings, grave anxiety, and similiar injury resulted therefrom
*Exemplary Damages= Ee should prove that his dismissal was done in wanton, oppressive or
malevolent manner.
*Attorney's fees = reasonable compensation paid to a lawyer by his client for legal services
rendered
(Extraordinary concept: It is paid as an item of damages to the client, not lawyer; Art 220, CC)
An EXCEPTION, not a General Rule.
-demands factual and legal justification.

Rule: Claims for damages arising from illegal dismissal should be established along the
principles of the Civil Code
Not enough for Ee to prove that he was dismissed without just cause.

Bad faith- A state of mind dominated by ill will or motive. Does not simply mean negligence or
bad judgement

Interest on Monetary awards (p484)

-imposed incase of delay in complying with the judgement
-judgement must AWARD the monetary benefit, not just merely confirmatory.
-delay was on the part of the Er (who is the debtor) (Art 2209, CC)
- interest should start from the finality of the judgement

GN: Corporate officers cannot be personally or solidarily liable wit the corporation for
backwages, damages and other money claims
E: *Corporate officer acted in bad faith
* Corporation is no longer existing and Ee can no longer run after the company
 Chapter 12
Managerial prerogatives (p489)

Managerial prerogatives
- inherent rights of all Ers to determine, according to their judgement, all aspects of employment
(hiring, work assignment, working methods, tools to be used, process to be followed,
supervision, transferm lay-off, discipline, dismissal or Ees)
- who can exercise Managerial Prerogatives? Exclusively to Er.

GN: NLRC or LA cannot exercise managerial prerogatives

E: Can inquire on whether the exercise of managerial prerogatives was tainted with bad faith or
Grave abuse of discretion

GN: Ers cannot place a job advertisement which suggests age preference, declining an
applicant for employment because of age
E: Can validly set age limitations when age is bona fide occupational qualification

Bona fide occupational qualification= standards which Ers are allowed to consider in making
decisions about hiring or retention of Ees

Prerogatives:

1)Promotion of Ees to supervisory/ managerial position as such are offices that can only be
held by persons who have trust of the Er
Ee who refused to accept promotion cannot be subjected to disciplinary action.

2) Transfering Ees (p491) - right of tenure not an issue as he cannot deprive company of its
prerogative to change assignment where he can be msot useful
Refusal to transfer- can be validly dismissed

3) Change work schedule- must be exercised in good faith for interest of the company and
NOT for the purpose of defeating or circumventing rights of Ee

4) To reorganize and abolish positions (p494) - right of an Er to conduct its own business
affairs
Abolishing a department/section cannot be questioned.

5) Reduce personnel - as Er cannot be compelled to give employment to a greater # of

persons that what the economic operations of his business requires.

6) Transfer of business ownership- buyer/ transferee is not legally obliged to absorb Ees of
the seller/transferror
Sucessor-Er Doctrine (p496)- Transfer og ownershup was done in bad faith, succesor-Er will be
deemed to have absorbed the Ees

7) Spin-Off - tranasformation of companies was a management prerogative and business

judgment

8) Closing down business- privilege of the management considering a lot of factors.

9) Promulgate company policies, rules and regulations- Until and unless the rules and
policies are declared to be illegal, the Ee must follow them

No Spouse employment policy- prohibition of Ees from marrying Ees of a competitor company is
valid.
- sought to be avoided: Conflict of Interest

Anti- Nepotism Employment Policy/ Reasonable Business Necessity rule (p498)- validity of an
employment policy that prohibits spouses from working for he same company should be tested
and proven that policy is founded on business necessity and not just on a general perception
that spouses in the same workplace might affect the business.

Non-compete Employment Policy (p499)- contract which prohibits an employee from engaging in
a business/ employment competitive with that of his employer after the term of his employment
(for a given period)
It will not be considered restraint of trade if:

1) Restraint imposed is not greater than what is necessary to afford reasonable protection to the
Er
2) Contract provides for a limitation upon either time or place.

*Non-compete agreement is reasonable and necessary if imposed against Ees who have
insight into the general scope and details of Er's business
*Limitation: Prohibition is limited to similiar or competitive business or employment for a
limited period.
*- even of the Ee admits to having breached the Non- Compete agreement, the Er must still
prove that it suffered damages and amount of damages that he incurred.

10) To promulgate Discipline -in the form of a warning, reprimand, suspension, demotion or
dismissal from service

Warning- Serves as caution

Reprimand- accompanied by censure, rebuke or sharp scolding
Suspension- temporary separation of an Ee from service
Demotion- imposed only for just cause after procedural requirements of due process have been
observed.
Dismissal- Er cannot be compelled to continue employment with a person guilty og malfeasance
or misfeasance.

Facts to be considered as to what type of disciplinary action should be imposed (p504)

1)Nature of offense
2)Position of Ee (Managerial, supervisors and other officers occipying trust and confidence are
subject to a stricted norm of discipline)
3) Degree of damage (not a determining factor in some offenses)
4) Past record of Ee
5) Length of service (the longer Ee has been in service, the greater is his responsibility) Longer
years of service will be taken against him

Heaviest consideration: Seriousness of offense.

Effect of acquital or conviction (p507)- not dependent upon a verdict of guilt or innocence in a
criminal case
Evidence required by law in Labor cases- substantial evidence
However, the subsequent convition of an Ee in a criminal cae will nullify the final judgement
declaring the dismissal illegal.
The conviction of the Ee in the criminal case affirms the existence of a valid ground for his
dismissal.

The right of Ees to participate in policy and decision-making is confined only to processes that
directly affect their rights, benefits and welfare.
 Chapter 13
Just causes for dismissal (p511)

Art 29 of the LC provides for the termination of employment of any of the ff causes-

1) Serious misconduct or willful disobedience

2) Gross and habitual neglect by the Er
3) Fraud or willful breach by the employee
4) Commission of a crime or offense by the Ee
5) Other causes analogous to the foregoing

Misconduct- improper or wrong conduct

-implies a wrongful intent, willful in character, as distinguished from a mere error of judgement

When Misconduct will constitute a Just Cause for Dismissal: If it is:

1) Serious and
2) Work-connected

Examples of Miscodncut that are not serious:

*Violation of the "First come, First served" policy
* Cash shortage in small amount
* Theft of company property that is of insiginificant value
*uttering slightly disrespectful language against a superior

Examples of serious misconduct (p514)

*Uttering insulting and offensive language

* Unauthorized use of company time
* Theft of Company property
* Refusal to curtail a Bellicose attitude
* Fighting inside company premises
* Mauling a co-employee
*Harassing a o-employee inside company premises
* Sexual intercourse inside company premises
Making false accusations
*Pressuring a co-faculty member to change a failing grade
*Series of irregularities

Disobedience to Er's orders (p518) will constitute a valid cause for dismissal when:
1) It is willful
2) Order is reasonable, lawful (It order is unlawful, it will not consitute willful disobedience)
3) Order must be work-connected

Neglect of Duty (p523)

-failure to give proper attention to tasks

-damage is not an element
When Neglect of Duty will constitute Just Cause for dismissal:

1) Gross
2) Habitual

Eg.. Habitual tardiness, absentism (Deduction from wages does not bar Er from penalizing Ee
for his tardiness)

Neglect Negligence

Person has not done what he has to do Indicates a particular reason why man has
(objective) failed to do his duty (subjective)

Fraud (p526)

- knowing misrepresentation of truth or concealment of material fact to induce another to act hs

or her detriment

When Fraud will constitute Just Cause for dismissal:

1) Work-connected
2) Committed against Er (Fraud committed against third persons may still be a valid cause if it
puts the Er under risk of a lawsuit)

Breach of trust (p528)

When Breach of Trust will constitute valid cause for dismissal:

1) Willful
2) Work-related
3) Committed by an Ee who holds a position of trust
Position of Trust: Alternative answer: All have right of security of tenure
Managerial and regularly handle money

*Conflict of Interest and misappropriation of company funds may also result in breach of trust
(p531)
Loss of confidence should have basis
Comission of a crime (p534)

Crime must be committed by the Ee against the person of the:

1) Er
2) Authorized representative
3) Immediate memebr of the Er's family

*Prior conviction not required

Analogous cases (p535)

-offense must have an element similar to the specific grounds enumerated udner Art 287 of the
LC
e.g attitude problem, unreasonable behavior, theft committed against another Ee, obesity

Other valid causes for dismissal (p539)

*Immorality should be treated and viewwed in a public and secular standpoint, not religious.
*Staging an illegal strike.
*Defiance of a return-to-work order.
*Breach of Union Security Agreement.
*Drug Abuse
*Failure to comply with a government regulation
*Violation of ompany rules and regulation
* Sexual harassment - act of demanding or requesting sexual favor, by a person having
authority or moral ascendancy over another

Committee in invstigation for sexual harassment complaints must be composed of:

-representatives from the management

-supervisors
-rank-and-file Ees
-union

atleast 1/2 of the members should be women. It must also be headed by a woman
Procedural Due process (p548) (Art 292, LC)

1) Serve a written notice to explain (atleast 5 days is sufficient to constitute ‘reasonable time to
explain’)
2) Conduct a hearing
3) Serve a written notice of decision to the EE (Twin Notice rule)

'Opportunity to be heard' is satisfied when Ee was first required to explain ebfore imposing a
disciplinary action

Preventive suspension (p551)- prevention of an Ee from causing harm to his co-Ees

- may place Ee if it poses serious and imminent threat
-not a penalty, merely a step in administrative investigation

Administrative hearing
-summary in nature
-not a matter of right (Ee shoudl ask for it)
- Confrontation of witness, not essential
- no right to counsel
-evidence: Substantial evidence

Effect of Dismissal without Due process (p552)

-If dismissal is adjudged to be valid, lack of due process does not nullify the dismissal.
- Er is only liable for nominal damages (amount is decided by court)

Remedy (p553)

-NLRC (Art 292, LC)

 Chapter 14
Authorized causes for Terminating an employment

Under Art 298 of LC:

1)Installation of labor-saving devices- Er has the right to mechanize/ modernize its business
even though it means dismissal of the employees (Soriano vs NLRC, Phil Sheet Metal Workers
vs CIR)

2) Redundancy -mode of reducing personnel when the required services are more than what is
demanded by the actual requirements of the enterprise.
-Er cannot be denied the right to reorganize to protect his Ees
- "Last in, First out" is not applicable in redundancy as what is looked into is the position itself,
the nature of services performed and necessity.
- can still be exercised even if not suffering losses. (financial condition not a factor)

Requisites: (p555)

* Abolition of position must be done in good faith

* Fair and reasonable criteria in determining redundancy of position

3)Retrenchment (p559)

-mode of reducing personnel to prevent/ minimize business losses.

Requisites:

1) Must be done to prevent losses (actual or unexpected losses) (Actual losses must be
substantial; not de minimis)
2) Fair and reasonable criteria must be used in determining who would be dismissed.
"Last-in-First-Out" can be applied
3) Retrenchment must be last resort

*Less drastic measures: Reduced time, rotation of workers, trimming costs, etc
*Expected/ Actual losses may be proven by income statement

Redundancy Retrenchment

Cause of termination Ees are superfluous or Avoid or minimize business

unnecessary losses.

A result of: Reorganization/ overhiring of Business recession, industrial

 workers, dropping of product depression, lack of work,
line reduction in volume of
business

Last in-first-out principle Not applied Applied

Separation pay 1 month pay/ 1 month for 1 month pay or at least 1/2
every year of service month pay for every year of
(whichever is higher) service (whichever is higher)

4)Prevent losses

5)Closing/ Cessation of Operation of establishment (p561) (Art 298)

- Art 298 contemplates permanent closure

-temporary closure is governed by Art 301 of the LC
-closure must be done at the instance of Er. If done by gov't, Er is not obliged to give separation
pay
-relocation of plant is considered as closure.

Termination Procedure (p 563)

Er should serve a written notice of at least 1 month in advance to:

1) Affected Ees (must be served personally) - posting in bulletin board does not count
2) DOLE (must be filed in Regional Office)

Failure to comply= nominal damages

Garden Leave (p565)

-Er may not require Ees not to report for work anymore
-to "stay at home and tend the garden"

Termination of Employment due to illness (Art 299)

-contemplates contagious and non-communicable diseases (stroke, heart attack, mental illness)
-diseases does not ipso facto make a valid dismissal

When can Er terminate employment due to illness?

1) Continued employment is prohibited by law or prejudicial to his health/ health of his co-Ee
2) Certification from competent health authority that disease is such nature/stage as it cannot be
cured within 6 months even with proper treatment (indispensible requirement)

If curable within 6 mos= sick leave

If not= termination + separation pay

Certain illnesses that cannot be used as ground for terminating employment:

*AIDS/HIV
*Hepatitis B
*Pregnancy-related illness

Relief for Ees terminated due to authorized causes (p568)

-due to: installation of labor-saving device, redundancy, retenchment to prevent losses, closure,
diseases = entitled to separation pay

Rates of Separation pay:

1) Atleast one month pay or 1 month pay for every year of service (whichever is higher) for:

*Installation of labor-saving device

* Redundancy

2) At least one month pay or one-half (1/2) month pay for every year of service (whichever
is higher) for:

*Retenchment
*Closure of establishment (not due to business losses)
*Disease

3) NO separation pay for:

*Due to serious business losses

* An act of the government without fault of the part of the Er

"For every year of service" means actual service.

Computation of length of service:

1)A fraction of at least 6 months = Considered as one whole year

e.g 5 years and 6 months of work= 6 years equivalent
2) Piece rate workers= Miminium wage (in the absence of prescribed wages for piece rate
workers)

3) Commission basis= based on avergae commissions earned during the past year of
employment

4) Seasonal Ees= 1/2 if their respectie average monthly pay during the last season x # of years
they rendered service (must work for atleast 6 months)

Can an Ee be entitled to both separation pay AND retirement pay?

1) NO if:

There is no retirement plan or CBA providing for such retirement benefit

Reason: 2 distinct reliefs

Separation pay Retirement pay

terminated for any of the authorized causes

(installation of labor-saving device, Ees who retire/ reach a certain age
redundancy, retrenchment to prevent losses,
closure)

2) YES if:

Ees who are terminated for any of the authorized causes may be entitled to both separation pay
and retirement pay

GR: No retirement benefits are payable in the instance of resignations or terminations for cause
E: One who oresigns after being qualified for optional early retirement
 Lay-off (p574)

-bona fide suspension of the operation of a business or understaking for a period not exceeding
6 months or fulfillment by the Ee of a military/civic duty shall not terminate emloyment (Art 301,
LC)
-Er shall reinstate the Ee to his former position if he indicates his desire to resume his work not
later than one month from resumption of operations of his Er from his relief from military or civic
duty
- temporary closure due to lack of orders, work, reduction in volume of businesses, lack of
materials, losses in business operations, business recission, industrial depression, floating
status

Consequence of Temporary closure:

1) If done in good faith: EMployment status is not terminated; just suspended

Operations resume= Er-Ee relationship is restored (Ee should indicate his desire to resume to
work not later than one month from resumption of operations) (Art 301, LC)

2)If done in bad faith: Employment is uninterrupted

Duration of temporary closure:

- should not exceed 6 months

If exceeded 6 months: Permmanent closure will ensue. Charge for illegal dismissal

1) Closure done in good faith: Ees will be entitled to separation pay of atleast 1 month pay or
1/2 month pay for every year of service (whichever is higher)
Except: Closure was due to serious business losses

2) Closure done in bad faith:

*Wages during 6-month period are demandable

*Ees will be entitled to separation pay of atleast 1 month pay or 1/2 month pay for every year of
service (whichever is higher)

Can the 6- month temporary closure be extended? (p576)

YES.

-In times of war, pandemic, and similiar national emergencies

- extension should be resported to Regional Officer of DOLE 10 days prior
-in computation of separation pay, teh first 6 months of termporary closure shall be included
-if Er resumes operations, the retenched Ees shall have the priority in re-hiring
 Chapter 16-

Resignation (p578)

Involuntary Resignation/ Constructive dismissal (Art 300, LC) stops working

1) Serious insult by the Er or his representative

2) Inhumane and unbearable treatment (must be beyond the occasional discomfort brought about by
the misunderstandings between Er and Ee)
3) Commission of a crime or offense by the Er or his representative
4) Other causes analogous to any of the foregoing

-Ee gives up his employment because Er does things that are intended to force Ee to quit

Test of constructive dismissal: Whether a reasonable person in the Ee's position would have felt
the need to give up his position because the Er or his representative subjected the Ee to serious
insult or inhuman and unbearable treatment, committed a crime against the Ee or his immediate
family members

-ee who decided to quit his job due to unbearability is not required to give one-month adavcne
notice (p582)
-Reinstatement not proper for constructively dismissed Ees
-Relief: Separation pay and backwages
-Ee constructively dismissed= Probationary Ee

Voluntary Resignation (p583) (Art 300, LC)

-formal renouncement or relinquishment of a job by an Ee with personal reasons that cannot be

sacrificed in favor or exigency of service

Requisites:

1) Intention How to see intent: actuations, previous conversation

2) Unconditional relinquishment of job

Voluntariness can be seen from:

* gratitude in resignation letter

*actuations of Ee
*discussed terms of separation
* not negated even if Er prepared the resignation letter
-Ee whovoluntarily resigns is obliged to give atleast one month advance notice to enable Er to
look for a replacement (Art 300, LC) (p588)
If EE does not comply with one-month requirment= hold Ee liable for damages
-effective upon acceptance/approval by Er
- may be withdawn without consent of Er
- if resignation is withdrawn, Er cannot be compelled to approve such withdrawal
- not entitled to separation pay

Resignation Constructive dismissal

voluntarily reliquishes his employment for Ee involunarily quits

personal reasons

Requires Ee to give Er 1 month notice 1 month notice, not required

Not entitled to separation pay Entitled to separation pay

Constructive resignation/ Abandonment of Employment (p592)

-deliberate and unjustified refusal of Ee to resume to his work

-difference with Voluntary Resignation: No notice of abandonment of work

Requisites:

1) Ee must absent himself

2) Absence is without valid cause
3) Overacts pointing to the fact that Ee does not want to work anymore

Confirmation of intent to abandon: Notice to report for work should be sent to last known
address of the Ee
 Chapter 17-
Retirement (p594)

Retirement-

-withdrawal from office, employment or occupation, upon reaching a certain ge or after

rendering a certain number of years of service
- retirement beenfits applies to Ees regardless of position
- Domestic helpers and those rendering personal service to another are enttiled to retirement
benefits

Retirement benefits computation:

-One half of a month's salary for every year of service

-a fraction of atleast 6 months =considered a one year

Not entitled to Labor Code Retirement Benefit (p595)-

1) Ees who have not rendered service for atleast 5 years (Art 302, LC)
2) Ees of retail, service or agricultural establishemnts

When can Ee retire:

1) When there is retirement plan, CBA or Employment contract- upon reaching retirement age
(Art 302, LC)
2) No retirement plan, CBA or employment contract- reaching the retirement age prescribed by
the Labor Code

Optional retirement age under the Labor Code (p597)

1) 50 years old- underground/ surface mine Ees

2) 60 years old- ordinary Ees (Art 302, LC)

Compulsory retirement age under the Labor Code

1) 55 years old- professional race jockeys

2) 60 years old- underground and surface mining Ees
3) 65 years old- ordinary Ees

Amount of retirement pay: (p599)

1) With retirement pla, CBA or employment contract:
-Provisions of such contract but shoudl not fall below floor limits set by the Labor Code
2) No retirement plan, CBA or employment contract: prescribed by Labor Code

Amount of retirement pay under the Labor Code:

1) 15 days salaray based on Ee's latest salary rate

2) Cash equivalent of 5 days service incentive leave
3) 1/12 of the 13th month pay due to Ee

-whether retirement was optional or compulsory, Ee is entitled to 1/2 month salary for every
years of service, 1/2 being computed at 22.5 days Santo vs Univ of Cebu

Computation of 1/2 month salary of Ees who do not have fixed wages (p602)

1) Commission based: Average commissioned earned during teh past year of employment
2) Paid by results: Average daily salary for the last 12 months
3) Seasonal Ees: average monthly pay during last season multiplied by the number of actual
years of service

-Computation of length of service: "for every year of service" = atual service

-retirement pay under SSS law is different (Art 302, LC)

De la Salle Araneta vs Bernardo- even part-timers are entitled to retirement pay

Alpha Jaculbe vs Silliman- retirement is at the option of the Ee.

Re-hire retirement issues: Re-hiring not computed for the sake of retirement benefits