EMPLOYER- one who employs the services of others; one for whom

employees work and who pays their wages or salaries.

any person acting in the interest of an employer, directly or indirectly.
The term does not include a labor organization or any of its officers and
agents, EXCEPT when acting as an employer.

EMPLOYEE- one who works for an employer; a person working for salary
or wages.
Shall not be limited to the employees of a particular employer, and
it shall include any individual whose work has ceased as a result of
or in connection with any current labor dispute or because of any
unfair labor practice IF he has not obtained any other:
1. Substantially equivalent and
2. Regular employment

PAL vs PALEA 19 SCRA 483

Cessation of work due to strike or lockout, or to dismissal or suspension

constituting unfair labor practices, does not itself affect the employee
status, in the sense that the rights and benefits of the employee are
protected as though there had been no interruption of service, effective
upon actual return to work. Thus, a striker may not be deprived of a
bonus merely because he had taken part in a strike. Generally upon
reinstatement of one whose dismissal constituted an unfair labor
practice, he is entitled to backwages, seniority and other rights, in order
to make the whole his loss as a result of the employers unlawful act

TYPES OF LABOR DISPUTES:

1. Labor Standards Disputes

a. Compensation [e.g., underpayment of minimum wage; stringent
output quota; illegal pay deductions]
b. Benefits [ e.g., nonpayment of holiday pay, overtime pay or other
benefits]
c. Working conditions [e.g., unrectified work hazards]

2. Labor Relations Disputes

 a. Organizational right dispute/ unfair labor practice [e.g., coercion,
restraint or interference in unionization efforts; reprisal or
discrimination due to union activities; company unionism]
b. Representation disputes [e.g., determination of the collective
bargaining unit; ULP strike; uncertainty as to determination of the
sole and exclusive bargaining agent of the employees in an
appropriate bargaining unit which is the majority union]
c. Bargaining disputes [e.g., refusal to bargain (ULP); bargaining
deadlock; economic strike or lockout]
d. Contract administration or personnel policy disputes [e.g.,
noncompliance with CBA provisions (ULP if gross noncompliance
with economic provisions); disregard of grievance machinery;
violation no strike/no lockout agreement]
e. Employment tenure disputes [e.g., non regularization of employees;
illegal termination; non-issuance of employment contract]

TYPES OF EMPLOYEE

ART. 280. Regular and Casual Employment. The provisions of written

agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the
employee or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the

preceding paragraph: Provided, That, any employee who has rendered at
least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which
he is employed and his employment shall continue while such actually
exists.
Regular Employees

A regular employee is similar to an indispensable cog in the corporate

machine. Under the law, regular employees are those hired for activities
which are necessary or desirable in the usual business of the employer.
Therefore, a regular employee enjoys the benefit of security of tenure as
guaranteed by the Constitution. This means that the employee cannot
simply be terminated, other than those Just and Authorized causes as
provided by law.

Regular employees or those who have been:

1. engaged to perform activities which are usually necessary or

desirable in the usual business or trade of the employer and
2. those who have rendered at least one (1) year of service whether
continuous or broken with respect to the activity they are employed

Project Employees

The major distinction between Regular employees and Project employees is

that the Project employees are hired for only a specific project or
undertaking. The length of period and scope of the work must be
specified at the time that the employees were hired for the project. The
company must however see to it that they comply with the Termination
report of project employees. This is compulsory under the law, for failure to
do so would indicate that the worker was not a project employee but a
regular employee.
Department Order No. 19, Series of 1993
Guidelines Governing the Employment of Workers in the Construction
Industry, issued by the DOLE:

Sec. 2.2 Indicators of project employment. - Either one or more of the

following circumstances, among others, may be considered as
indicators that an employee is a project employee.

(a) The duration of the specific/identified undertaking for which the

worker is engaged is reasonably determinable.

(b) Such duration, as well as the specific work/service to be

performed, is defined in an employment agreement and is made clear
to the employee at the time of hiring.

(c) The work/service performed by the employee is in connection with

the particular project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is

free to offer his services to any other employer.

(e) The termination of his employment in the particular

project/undertaking is reported to the Department of Labor and
Employment (DOLE) Regional Office having jurisdiction over the
workplace within 30 days following the date of his separation from
work, using the prescribed form on employees'
terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay

completion bonus to the project employee as practiced by most
construction companies.

In a number of cases, the Court has held that the length of service or the
re-hiring of construction workers on a project-to-project basis does not
confer upon them regular employment status, since their re-hiring is only a
natural consequence of the fact that experienced construction workers are
preferred. Employees who are hired for carrying out a separate job, distinct
from the other undertakings of the company, the scope and duration of
which has been determined and made known to the employees at the time
of the employment, are properly treated as project employees and their
services may be lawfully terminated upon the completion of a project.
Should the terms of their employment fail to comply with this standard, they
cannot be considered project employees. (Cioco, Jr. v. C.E. Construction
Corporation, G.R. Nos. 156748 and 156896, 8 September 2004, 437 SCRA 648,
652; Filipinas Pre-Fabricated Building System (Filsystem), Inc. v. Puente, supra
note 23 at 831; Abesco Construction and Development Corporation v. Ramirez,
G.R. No. 141168, 10 April 2006, 487 SCRA 9, 14; D.M. Consunji, Inc. v. National
Labor Relations Commission, 401 Phil. 635, 641 (2000)

In Caramol v. National Labor Relations Commission, and later reiterated

in Salinas, Jr. v. National Labor Relations Commission, the Court markedly
stressed the importance of the employees' knowing consent to being
engaged as project employees when it clarified that "there is no question
that stipulation on employment contract providing for a fixed period of
employment such as `project-to-project' contract is valid provided the
period was agreed upon knowingly and voluntarily by the parties,
without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his
consent x x x."

Project employees, due to the nature of their employment, are not entitled
to separation pay for termination or separation from employment due to the
completion of the project. Thus, (t)he services of project employees are
coterminous with the project. They may be terminated upon end or
completion of that project or phase thereof for which they were hired.

The employer has no obligation to pay them separation pay.

(I)f a project employee is dismissed his removal must still comply with the
substantive and procedural requirements of due process. Sec. 3, Art. XIII, of the
Constitution mandates that the State shall afford full protection to labor and
declares that all workers shall be entitled to security of tenure. The fundamental
guarantee of security of tenure and due process dictates that no worker shall be
dismissed except for a just and authorized cause provided by law and after due
process has been properly complied with. Therefore, a project employee hired for
a specific task also enjoys security of tenure. A termination of his employment
must be for a lawful cause and must be done in a manner which affords him the
proper notice and hearing. Thus, a project employee must be duly furnished a
written notice of his impending dismissal and must be given the opportunity to
dispute the legality of his removal (Archbuild Masters and Construction, Inc. and
Joaquin C. Regala vs. NLRC G.R. No. 108142, December 26, 1995).

Probationary Employees

This category pertains to workers which placed on a probationary status for

6 months, as is customary with the general practice. Here, the employee is
in the evaluating or qualifying stage, and he may be converted to regular
status if his performance is up to par with the company standard. Such
reasonable standards must be made known to the employee at the time of
hiring. Also, if such employee is allowed to work beyond the probationary
period, even if designated as an extension period, then he is protected by
the law and considered as a regular employee.
Temporary employment status. Employee terminable anytime as long as
such termination is made before the expiration of the 6-month
probationary period.

May only be terminated if:

1. For a just cause
2. When the employee fails to qualify as a regular employee in
accordance with the reasonable standards made known to him by
the employer at the start of his employment.
Power to terminate subject to following conditions:
1. Exercised in accordance with specific requirements of the contract
2. Dissatisfaction on the part of the employer must be real and in
good faith, not prejudicial so as to violate the contract or the law
3. There must be no unlawful discrimination in the dismissal.
GENERAL RULE: Probationary employment shall not exceed six months
from the date the employee started working.

EXCEPTIONS:
1. when it is covered by an apprenticeship agreement stipulating a
longer period; or
2. when the parties to an employment contract agree otherwise,
such as when the same is established by company policy or when the same
is required by the nature of the work to be performed by the employee

EFFECT IF PROBATIONARY EMPLOYEE IS ALLOWED TO

WORK BEYOND 6 MONTHS

If the probationary employee is allowed to work beyond the period of 6

months or the agreed probationary period, said employee becomes a
regular employee by operation of law.

Under the Labor Code, an employee who is allowed to work after a

probationary period shall be considered a regular employee. (Art. 281.)

Fixed Term Employees

Also known as Fixed-Term work, Term employees are those who are hired
for a specific period only. The arrival of the date in the contract
automatically terminates him as an employee in the company. However,
there are 2 elements that should be considered so that term employment
contracts will not circumvent security of tenure:

First, the fixed period of employment should be knowingly and voluntarily

agreed upon by the parties, without any force or pressure affecting his
consent.

Second, it should appear that the employer and employee dealt with each
other on more or less equal terms, with no moral dominance exerted by the
employer at the disadvantage of the employee.
Seasonal Employees

Seasonal employees are those hired for activities which are called to work
from time to time. These may include regular seasonal employees, who are
temporarily laid off or suspended during the off season. But during
Christmas holidays, for instance, when their services may be needed, they
are hired by the company. Regular seasonal employees are not separated
from service but merely considered on leave of absence without pay until
re-employed.
Pakiao employees are considered employees as long as the
employer exercises control over the means by which such workers
are to perform their work.

Employee is considered an regular employee insofar as the season

to which he was employed is concerned.
- during the off-season his employment is merely suspended not
terminated (Phil. Tobacco Flue Curring and Drying Corp. vs.
NLRC).

Casual Employees

These workers are hired for work or activities which are merely incidental
to the business. It is not indispensable nor primarily related to the line of
work of the of the employer. However, casual workers who have rendered at
least 1 year of service, whether continuous or not, are deemed to be Regular
employees with respect to the work for which they are employed, for as long
as the activity exists.
 PROJECT EMPLOYEE REGULAR EMPLOYEE

A project employee is one whose A regular employee is one

employment is fixed for a
specific project or undertaking
the completion of which has
been determined at the time of
the engagement of the
employee. (See Art. 280 LC)
engaged to perform activities
which are usually necessary or
desirable in the usual business or
trade of the employer

Regular employees by nature of work Regular employees by years of

service

Performs activities which are necessary Have been performing the job, not
or desirable in the usual business or usually necessary or desirable in the
trade of the employer regardless of usual business or trade of the employer
their length of service. for at least a year.

Employment for an indefinite period. Only as long as the activity they are
engaged actually exists.
 TERMINATION OF EMPLOYMENT

ART. 279. SECURITY OF TENURE

SECURITY OF TENURE - the constitutional right granted the employee,

that the employer shall not terminate the services of an employee except for
just cause or when authorized by law.

SECURITY OF TENURE
Right of employee against unjust and arbitrary dismissal. Since work is
property in a constitutional sense, he can not be deprived of it without:
1. a just or authorized cause
2. due process (notice and hearing)

- includes his rights against unwarranted transfers, demotion and

diminution of his benefits.

A. JUST CAUSES
1. Serious MISCONDUCT OR WILLFUL DISOBEDIENCE by the employee
of the lawful orders of his employer or representative in connection with
his work;
Misconduct- transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment. (Dept. of
Labor Manual, Sec. 4353.01)

2. Gross and habitual NEGLECT by the employee of his duties; (Repeated

absenteeism and tardiness)

3. FRAUD OR WILLFUL BREACH by the employee of the trust reposed in

him by his employer or duly organized representative
Fraud must be committed against the employer or his representative
and in connection with the employees work. ((Dept. of Labor
Manual, Sec. 4353.01 [3])
4. 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
Conviction or prosecution is not required.

5. Other causes ANALOGOUS to the foregoing.

A cause must be due to the voluntary or willful act or omission of the
employee. (Nadura v. Benguet Consolidated; G.R. No. L-17780)

Elements of DISOBEDIENCE or INSUBORDINATION:

1. Employees conduct must have been willful and intentional, wilfulness
being a wrongful and perverse mental attitude
2. The rules instructions must be reasonable, lawful, made known to the
Employees and pertain to the duties which he has been engaged to
discharge

GROSS NEGLIGENCE as a ground for dismissal: negligence

characterized by want of even the slight care, acting or omitting to act in a
situation where there is duty to act, not inadvertently but wilfully and
intentionally with a conscious indifference to consequences as far as other
persons may be affected.

LOSS OF CONFIDENCE as a ground for dismissal- a valid ground, proof

beyond reasonable doubt is not required to dismiss him in his charge.
It is sufficient if there is some basis for the loss of confidence.

Requisites:
1. Should not be simulated
2. should not be used as a subterfuge for illegal or unjustified causes

3. should not be arbitrary and asserted in the face of overwhelming

evidence to the contrary
4. must be genuine and not a mere afterthought to justify earlier action
taken in bad faith
DUE PROCESS TO BE OBSERVED
BY THE EMPLOYER

For termination of the employment based on the any of the just causes for
termination, the requirements of due process that an employer must
comply with are: (TWIN NOTICES RULE)

1. Written NOTICE should be served to the employee specifying the

ground or grounds for termination and giving the said employee
reasonable opportunity within which to explain;
2. A HEARING OR CONFERENCE should be held during which the
employee concerned, with the assistance of counsel, if the employee so
desires, is given the opportunity to respond to the charge, present his
evidence and present the evidence presented against him;
3. A WRITTEN NOTICE OF TERMINATION, if termination is the
decision of the employer, should be served on the employee indicating
that upon due consideration of all the circumstances, grounds have
been established to justify his termination.

For termination of employment based on authorized causes, the

requirements of due process shall be deemed complied with upon
service of a written notice to the employee and the appropriate
Regional office of the Department of Labor and employment at least
thirty days before the effectivity of the termination specifying the
grounds for termination.

NOTE: Under the so-called WENPHIL DOCTRINE if the services of the

employee was terminated due to a just or authorized cause but the affected
employees right to due process has been violated, the dismissal is legal but
the employee is entitled to damages by way of indemnification for the
violation of the right.

SERRANO vs. ISETANN et. al. abandoned the WENPHIL DOCTRINE

and ruled that if the employee is dismissed under just or authorized cause
but the affected employees right to due process has been violated, his
dismissal becomes ineffectual. Therefore, the employee is entitled to
backwages from the time he was dismissed until the determination of the
justness of the cause of the dismissal.

AGABON vs. NLRC (Nov. 17, 2004) abandoned the Serrano doctrine
and REINSTATED THE WENPHIL DOCTRINE. The sanctions,
however must be stiffer than that imposed in Wenphil.

AUTHORIZED CAUSES OF TERMINATION BY THE EMPLOYER:

1. installation of labor-saving devices (AUTOMATION)

2. REDUNDANCY (superfluity in the performance of a particular work)

redundancy, for purposes of the Labor Code, exists where the services
of an employee are in excess of what is reasonably demanded by the
actual requirements of the enterprise. (Wishire File Co. Inc. vs. NLRC)

Reorganization as a cost-saving device is acknowledged by

jurisprudence. An employer is not precluded from adopting a new
policy conducive to a more economical and effective management, and
the law does not require that the employer should be suffering financial
losses before he can terminate the services of the employee on the
ground of redundancy (DOLE PHILIPPINES, INC et al., vs.
NATIONAL LABOR RELATIONS COMMISSION et al.)

3. RETRENCHMENT to prevent losses (there is excess of employees and

employer wants to prevent financial losses)

CONDITIONS UNDER WHICH AN EMPLOYER MAY

RETRENCH:
(a) substantial losses which are not merely de minimis in extent;
(b) imminence of such substantial losses;
(c) retrenchment would effectively prevent the expected and additional
losses;
 (d) the alleged losses and expected losses must be proven by sufficient
and convincing evidence. (NDC-GUTHRIE PLANTATIONS, INC., vs.
NATIONAL LABOR RELATIONS COMMISSION, ET. AL)

4. Closing or CESSATION OF OPERATION of the establishment or

undertaking UNLESS the closing is for the purpose of circumventing the
provisions of the Labor Code.

5. DISEASE

a. the disease is incurable within 6 months and the continued

employment of the employee is prohibited by law or prejudicial to
his health as well as to the health of his co-employees

b. with a certification from public heath officer that the disease is

incurable within 6 months despite due medication and treatment.

Before an employer could dismiss an employee based on a disease, Section

8 of Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code
requires a certification by a competent public health authority that the
disease is of such a nature or at such stage that it cannot be cured within a
period of 6 months even with proper medical treatment. (Cathay Pacific
Airways vs. NLRC and Martha Singson)

DISCRIMINATION IN ANY FORM FROM PRE-EMPLOYMENT TO POST-

EMPLOYMENT, INCLUDING HIRING, PROMOTION OR ASSIGNMENT,
BASED ON THE ACTUAL, PERCEIVED OR SUSPECTED HIV STATUS OF
AN INDIVIDUAL IS PROHIBITED. TERMINATION FROM WORK ON
THE SOLE BASIS OF ACTUAL, PERCEIVED OR SUSPECTED HIV
STATUS IS DEEMED UNLAWFUL. (SEC. 35, RA 8504, HIV/AIDS
LAW)
 CAUSE OF TERMINATION SEPARATION PAY
Automation Equivalent to at least one month pay or
at least one month pay for every year of
service, whichever is higher
Redundancy Equivalent to at least one month pay or
at least one month pay for every year of
service, whichever is higher
Retrenchment Equivalent to one month pay or at least
one-half month pay for every year of service
Closures or cessation of Equivalent to one month pay or at least
operations not due to serious one-half month pay for every year of service
business losses or financial (If due to severe financial losses, no
reverses separation pay due.)
Disease Equivalent to at least one-month salary or
to month salary for every year of service,
whichever is greater, a fraction of at least 6
months shall be considered one (1) whole
year.
 NOTE:

ARTICLE 283 governs the grant of separation benefits in case of closures

or cessation of operation of business establishments NOT due to serious
business losses or cessation of operation [North Davao Mining Corp. vs.
NLRC, et al].
Therefore, the employee is not entitled to such benefit if the closure was
due to SERIOUS BUSINESS LOSSES.

When termination of employment is brought by the failure of an employee

to meet the standards of the employer in case of probationary employment,
it shall be sufficient that a written notice is served the employee within a
reasonable time from the effective date of termination.

When termination is brought about by the completion of the contract or

phase thereof, no prior notice is required

RELIEFS AVAILABLE TO AN ILLEGALLY DISMISSED

EMPLOYEE:

A. REINSTATEMENT - Restoration of the employee to the state from

which he has been unjustly removed or separated without loss of seniority
rights and other privileges.

FORMS OF REINSTATEMENT:

1. ACTUAL OR PHYSICAL REINSTATEMENT

- the employee shall be admitted back to work
2. PAYROLL REINSTATEMENT
- the employee is merely reinstated in the payroll.

May a court order the reinstatement of a dismissed employee

even if the prayer of the complaint did not include such relief?

YES. So long as there is a finding that the employee was illegally

dismissed, the court can order the reinstatement of an employee even if the
complaint does not include a prayer for reinstatement, unless, of course,
the employee has waived his right to reinstatement. By law, an employee
who is unjustly dismissed is entitled to reinstatement, among others. The
mere fact that the complaint did not pray for reinstatement will not
prejudice the employee, because technicalities of law and procedure are
frowned upon in labor proceedings (General Baptist Bible College v.
NLRC; 219 SCRA 549).

What happens if there is an order of reinstatement but the

position is no longer available?

The employee should be given a SUBSTANTIALLY EQUIVALENT

POSITION. If NO SUBSTANTIALLY EQUIVALENT POSITION IS
AVAILABLE, reinstatement should not be ordered because that would in
effect compel the employer to do the impossible. In such a situation, the
employee should merely be given SEPARATION PAY CONSISTING OF
ONE MONTH SALARY FOR EVERY YEAR OF SERVICE.

CIRCUMSTANCES WHEN COMPANY MAY NOT REINSTATE

DESPITE ORDER OF REINSTATEMENT

1. TRANSFER OF BUSINESS OWNERSHIP -There is no law

requiring a purchasing corporation to absorb the employees of the
selling corporation. A fortiori, reinstatement of unjustly dismissed
employees CANNOT be enforced against the new owner UNLESS there
is an express agreement on the assumption of liabilities by the
purchasing corporation;
2. When reinstatement is rendered IMPOSSIBLE due to the abolition of
the position;
3. When the business has CLOSED DOWN;
4. PHYSICAL INCAPACITY of the employee; and
5. DOCTRINE OF STRAINED RELATIONS - When the employer can
no longer trust the employee and vice-versa, reinstatement could not
effectively serve as a remedy. This doctrine only applies only to positions
which require trust and confidence

Under the circumstances where the employment relationship has become

so strained to preclude a harmonious working relationship, and that all
hopes at reconciliation are nil after reinstatement, it would be more
beneficial to accord the employee backwages and separation pay IN LIEU
OF REINSTATEMENT.
B. BACKWAGES the relief given to an employee to compensate him
for lost earnings during the period of his dismissal.

PERIOD COVERED BY THE PAYMENT OF BACKWAGES -

Backwages shall cover the period from the date of dismissal of the employee
up to the date of actual reinstatement

HOW COMPUTED - Under existing law, backwages is computed from

the time of the illegal dismissal up to time of actual reinstatement.

INCLUDED IN THE COMPUTATION OF BACKWAGES

1. transportation and emergency allowances
2. vacation or service incentive leave and sick leave
3. 13th month pay.

CIRCUMSTANCES THAT PREVENT AWARD OF BACKWAGES:

1. death of the employee
2. physical and mental incapacity
3. business reverses
4. closure of business
5. reinstatement of dismissed employee
confinement in jail

Which takes precedence in conflicts arising between

employers MANAGEMENT PREROGATIVE and the employees
right to security of tenure?

The employees right to security of tenure. Thus, an employers

management prerogative includes the right to terminate the services of the
employee but this management prerogative is limited by the Labor Code
which provides that the employer can terminate an employee only for a just
cause or when authorized by law. This limitation is because no less than the
constitution recognizes and guarantees employees right to security of
tenure. (Art. 279, Labor Code; Art. XIII, Sec. 3, Constitution)
 TERMINATION BY THE EMPLOYEE:

a. WITHOUT JUST CAUSE- by serving a WRITTEN NOTICE on the

employer at least one month in advance. The employer upon whom no such
notice was served may hold the employee liable for damages.

b. WITH JUST CAUSE - An employee may put an end to establish

WITHOUT SERVING ANY NOTICE on the employer for any of the
following just causes

1. SERIOUS INSULT by the employer or his representative on the

hour 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.

CONSTRUCTIVE DISMISSALS:
a. Employee quits work due to Employers unreasonable, humiliating
and demeaning actuations which rendered continued work
impossible is deemed to have been illegally dismissed, w/o
diminutions of salary.
b. means quitting because continued employment is impossible,
unreasonable or unlikely, as an offer in diminution in rank and in pay
c. is an involuntary resignation resorted to when continued
employment rendered impossible.
d. Transfer amounts to constructive dismissal when it is
UNREASONABLE, UNLIKELY, INCONVINIENT, IMPOSSIBLE
AND PREJUDICIAL TO THE EMPLOYEE
Constructive dismissal is an employers act amounting to dismissal but
made to appear as if it were not a dismissal in disguise. In most cases of
constructive dismissal, the employee is allowed to continue to work, but is
simply reassigned, or demoted, or his pay diminished without a valid
reason to do so.

Constructive dismissal does not always involve forthright dismissal or

diminution in rank, compensation, benefit and privileges. There may be
constructive dismissal if an act of clear discrimination, insensibility or
disdain by an employer becomes so unbearable on the part or the employee
that it could foreclose any choice by him except to forego his continued
employment. (Hyatt Taxi Services case, G.R. No. 143204, June 26,
2001.)

Constructive Dismissal and Involuntary Resignation

Constructive dismissal is an involuntary resignation resulting in cessation
of work resorted to when continued employment becomes impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution
in pay; or when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to an employee.

In Globe Telecom, Inc. v. Florendo-Flores, it was held that where an

employee ceases to work due to a demotion of rank or a diminution of pay,
an unreasonable situation arises which creates an adverse working
environment rendering it impossible for such employee to continue
working for her employer. Hence, her severance from the company was not
of her own making and therefore amounted to an illegal termination of
employment. (Cited in Francisco vs. NLRC, G.R. No. 170087, August 21,
2006.)
 CASES
1. Diminution of pay. A diminution of pay is prejudicial to the employee and
amounts to constructive dismissal. (Francisco vs. NLRC)
2. Transfer of employee not amounting to constructive dismissal. Transfer of
an employee from one area of operation to another is a management
prerogative and is not constitutive of constructive dismissal, when the
transfer is based on sound business judgment, unattended by a demotion in
rank or a diminution of pay or bad faith. (Tan vs. NLRC, G.R. No. 128290,
November 24, 1998.)
3. Transfer of employee amounting to constructive dismissal. A transfer
amounts to constructive dismissal when the transfer is unreasonable,
unlikely, inconvenient, impossible, or prejudicial to the employee. (Phil.
Industrial Security Agency Corp. vs. Aguinaldo, G.R. No. 149974, June 15,
2005.)

RETIREMENT

RETIREMENT AGE - The age of retirement is that specified in the CBA

or in the employment contract. In the absence of a retirement plan or
agreement providing for retirement benefits of employees in an
establishment, an employee upon reaching the age of 60 years or more, but
not beyond 65 years which is hereby declared as the compulsory retirement
age, who has served at least 5 years in said establishment.

The rule is different with respect to underground mining employees

whose optional retirement age is 50-60 provided they have at least
served for a period of 5 years (Art. 287 as amended by RA 8558).

BENEFITS- A retiree is entitled to a retirement pay equivalent to at

least month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year.

Unless the parties provide for broader inclusions, the term one half (1/2)
month salary shall mean:
15 days plus 1/12 of the 13th month pay and
the cash equivalent of NOT more than 5 days of service incentive
leaves.
(22.5 days per year of service)
NOTE: Exempted from the payment of retirement pay are retail, service
and agricultural establishments or operations employing NOT more than
ten (10) employees or workers.