STATUTORY OBLIGATION due to authorized causes under 283

and 284
1. FOR VALID DISMISSAL UNDER 283(Closure of establishment and reduction of personnel.) AND
284(Deseas as ground for termination).

A. Labor saving devices and Redundancy = 1 month or 1 month * year of service whichever is
higher. Fraction of 6 months considered 1 year.

B. Retrenchment, Closure or Cessation of business not due to serious business losses = 1month
or 1/2/month * yos. Fraction of 6 months considered 1 year.

C. RCC due to serious business losses or financial reverses = NO SEPARATION PAY (North Davao
Mining case)

Include transportation and emergency living allowance.

AS FINANCIAL ASSISTANCE

General Rule: If based on 282, NO SEPARATION PAY.

ART. 282. Termination by employer. - An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and

(e) Other causes analogous to the foregoing.

1. Exceptions

PLDT vs NLRC and Abucay

If the valid ground of dismissal is based on 1.) Serious misconduct and 2.) reflects the moral
character of the employee, separation pay is not proper as it serves as it perverts the meaning of
social justice undermining the efforts of labor t cleans its ranks of all undesirables. Else, justified.

Cruz vs NLRC and PLDT (Exception to the exception)

Where there is a valid ground for dismissal but there is doubt that dishonesty is not committed,
Financial assistance may be Granted. In this case, the award for financial assistance is anchored
on equitable considerations.

Eastern shipping lines vs Sedan (Exception to the exception)

Anchored on compassionate justice, financial assistance is granted even to an employee who is

forced to retire while not being covered by the company’s retirement plan. He worked for 24
years.

Financial assistance, though not objected by the employer, may be revoked. Chua v. Nestle

There is illegal dismissal but reinstatement is not possible, Financial assistance is given.

Separation pay as - resignation pay or gratuity.

An criminal action does not suspend the filing of an action for illegal dismissal because it is
an administrative case.

BACKWAGES - REINSTATEMENT 2 reliefs to an illegally dismissed employee.

BACKWAGES - lost earnings as an effect of illegal dismissal. This presupposes illegal

termination. AWARDED ONLY WHEN THERE IS ILLEGAL DISMISSAL.
 REINSTATEMENT - restoration to a state of condition from which one had been removed. An
action for reinstatement must be filed within 4 years and accues from the accrual of such right.

BACKWAGES v SEPARATION PAY

Former: Serves to restore all possible income produced by the employment during the
period of illegal dismissal.

Latter: a substitute for the immediate and continued reemployment. Granted in

consideration of the transition period of unemployment to employement which the
employee shall experience.

St. Michaels Institute et al vs Santos

Substantive rights cannot be defeated by mere procedural lapses. Art 279 of the labor code
gives an employee 2 remedies. First is to be reinstated or if not possible, separation pay. The
second is the award of backwages for the duration of his illegal termination.

COMPUTATION

Evangelista vs NLRC

Rate shall be the wage rate at the time of dismissal.

BACKWAGES = 13th month pay(if supposed to be given), allowances

*wage increase is excluded.

Computed from the time of illegal dismissal or the time the income is withheld---> up to the time
of his actual reinstatement.

Mercury Drug Rule = granting of backwages without deduction for the maximum period of 3
years.

Mercury Drug Rule

Granting of full backwages without deduction or reduction for a maximum period of 3 years.

Mercury Drug Rule abandoned by Ferrer case

BUSTAMANTE VS NLRC

Mercury Drug Rule Revived but has not limit.

Backwages should not be diminished by earnings derived by an employee elsewhere during the
period of illegal dismissal.

WHENFIL DOCTRINE

Employer dismisses under valid grounds but does not observe procedural due process must pay
indemnity. An employee must be dismissed under just or authorized cause and after due process.
*Modified by Serrano - Supplied by AGABON AND JAKA.

Penalty is 1,000 or depending on the facts of the case and gravity of the omissions committed by
the employer.

Serrano

Rather, the remedy is to order the payment to the employee of full backwages from the time of
his dismissal until the court finds that the dismissal was for a just cause. But, otherwise, his
dismissal must be upheld and he should not be reinstated.

RETA v. NLRC

Employer was penalized in the amount of 10,000 for dismissing an employee from a ship on
foreign port.

Alhambra vs NLRC

Not the same facts but the same amount but in this case, the court imposed such amount as “fair,
reasonable and realistic “ amount of penalty against the employer.
In other cases, 2k etc... But in the case of

Fe Segubuero v. NLRC

The Court is aware of the varying amounts imposed as penalty, thus the Supreme Court reiterates
that such amount depends on the facts of each case and gravity of the omission of the employer.

AGABON v. NLRC(as modified by jaka & timber)

*Ruling that controls today

Prevents the practice of “dismiss now pay later”

Held:

Termination is valid, the employee remains dismissed but the employer must pay indemnification
higher than in the Whenphil case but lighter than fullbackwages.

If the dismissal is based on 282 - give 2 written notices or opportunity to be heard if requested by
the employee before termination of employment.

1st notice = specifies the grounds, notice of hearing or decision to dismiss

2nd notice = given to DOLE 30 days prior effectivity of the termination of employment.

There are 4 instances in the termination of an employee.

1. Just, authorized causes or health reason + due process

Valid dismissal + no employer liability

2. W/o Just or authorized causes + due process (0 - 0)

Illegal dismissal + reinstatement w/ full backwages(from suspension of payment to

reinstatement)

3. W/o JA + no due process (0 - 1)

SAME

4. W/ JA + no due process (1-0)

Valid dismissal + employer liable for non-compliance with the procedural requirements of
due process.

In the fourth situation, abandon Serrano and follow Whenfil upholding the termination for just
cause but imposing sanctions. Thus, the employer must pay indemnity in the form of nominal
damages.

* this ruling does not distinguish whether the valid dismissal is just or authorized.

JAKA v (FINETUNES AGABON)

1.

If {dismissal just cause + non-compliance of procedural due process}

Then {sanction is tempered because it is attributable to the employee}

2.

If {dismissal authorize cause + non-compliance}

Then { stiffer sanction because it was initiated by employer}

Industrial Timber(refines jaka)

No. 2 of JAKA on the rule on AUTHORIZED CAUSES is refined where:

IF {authorized cause due to losses}

THEN {the penalty is lighter}

ELSE {Stiffer}
 REINSTATEMENT

Restoration of an employee who was unjustly dismissed to the position upon

which he was removed.

Reinstatement goes with the award of backwages and the inappropriateness of one or invalidity does
not bar the other.

Action for reinstatement prescribes in 4 years.

Reinstatement w/o backwages

employer is in goodfaith and reinstatement is considered reasonable

(20 years of service without previous derrogatory record)

Manila Electric Co. V. NLRC

Reinstatement not feasible because of changed circumstances

(payment of full backwages + separation pay) 1month or 1month per year of service whichever is
higher.

RATE if in lieu of reinstatement 1month or 1month*year of servce GACO v nlrc

{
If Reinstatement cannot be had because the employee reached the retirement age. (Full
backwages + separation pay + benefits based on CBA or labor code)

SP = 1moth pay or 1month*year of service w/c ever is >

}

Reinstatement enforced despite closure

{
Where reinstatement is deemed proper but the employer closed however due to the fact that it
was absorbed by another without evidence of distinction.

} Pepsi Bottling Co. V NLRC #this case awarded back-wages in lieu of reinstatement due to the
hostile relationship which resulted hence, an impossibility of reinstatement.

STRAINED RELATIONS bars Reinstatement

Where the relationship is so strained and ruptured as to preclude harmonious relationship should
reinstatement be decreed, the employee is entitled to separation pay equivalent to 1month pay
for ever year of payment + backwages.

To show Strained relations

{

1. Employee occupies the position where he enjoys the trust and confidence of the employers

2. An atmosphere of antipathy and antagonism may be generated by reinstatement.

} Globe-Mackay v NLRC and Salazar

a confidential employee

1. Assists or acts in confidential capacity

2. Formulate, determine and effectuate management policies in the field of labor relations.

No strained relationship may arise from a valid and legal assertion of one’s right.

Strained relations is a factual issue. If it is raised only on appeal, then no evidentiary basis
supports the assertion that a peaceful working relationship was no longer possible.

Grounds justifying non-reinstatement

JO-CARS

Justified Redunduncy
Other similar justifications

Closure

Attainment of retirement age

Retrenchment

Strained relations

What is the salary rate upon reinstatement?

Standard of living in a country and purchasing power of the domestic currency.

TWO TYPES OF REINSTATEMENT

PAYROLL

ACTUAL

Roquero v PAL

Even if reinstatement is reversed on appeal, no reimbursement of what employer has paid during
the reinstatement.

GARCIA v. PAL

No reimbursement. Decision reinstating an employee is immediate and may be authorized even if

the employer files an appeal for reinstatement is a saving act.

AN AWARD for reinstatement is self-executory

Reinstatement order of the Labor Arbiter is self-executory. Art.223. An employer has to choose
immediately whether to reinstate the employee to his former conditions and under the same
terms or reinstate the latter in the payroll. Any choice of the employer must be immediately
communicated to the employee.

NLRC’s REINSTATEMENT ORDER NOT SELF-EXECUTORY

The order of the NLRC reinstating an employee shall be final and executory after 10 days from
receipt and requires issuance of a writ of execution within 5 years from the date of finality.
Reinstatement order of the NLRC is not self-executory because it requires a writ of execution.
224(a)p(6)

What if the employee chose not to be reinstated?

He shall be entitled to separation pay and full backwages. Labor vs NLRC and Gold City
Commercial et al.

Moral damages when awarded.

Awarded only when it sprung from a wrongful act or ommission of the defendant which is the
proximate cause thereof. 2220 Civil Code.

If there is:

Fraud or

Oppressive labor

Contrary to morals, good customs or public policy.

Award damages.

Bad faith

Since law presumes good faith, prove bad faith.

Malice or bad faith... "implies a conscious and intentional design to do a

wrongful act for a dishonest purpose or moral obliquity”

Exemplary Damages when awarded

Award of moral and exemplary damages in favor of the employee who was

illegally dismissed shall be upheld where the employee had been harassed by the employer OR
when dismissal is effected in a wanton, oppressive or malevolent manner.

Solidary liability

There are times, however,

when solidary liabilities may be incurred but only when exceptional circumstances

warrant such as in the following cases:

"1. When directors and trustees or, in appropriate cases, the officers of a

corporations:

(a) vote for or assent to patently unlawful acts of the corporation;

(b) (b)act in bad faith or with gross negligence in directing the corporate affairs; (c) are guiltyof
conflict of interest to the prejudice of the corporation, its stockholders or members,and other
persons;

2. When a director or officer has consented to the issuance of watered stocks

or who, having knowledge thereof, did not forthwith file with the corporate secretary

his written objection thereto;

3. When a director, trustee or officer has contractually agreed or stipulated

to hold himself personally and solidarily liable with the corporation; or

4. When a director, trustee or officer is made, by specific provision of law,

personally liable for his corporate actions.2

In labor cases, particularly, corporate directors and officers are solidarity liable

with the corporation for the termination of employment of corporate employees

done with malice or in bad faith.

Limited Liability of Indirect Employer

An indirect employer should not be made liable without a finding that it had ommitted or
conspired in the illegal dismissal.

ART. 285. TERMINATION BY EMPLOYEE

(a) An employee may terminate without just cause the employee employer relationship by
serving a written notice on the employer at least one (1) month in advance. The employer upon
whom no such notice was served may hold the employee liable for damages.

MAGSUBMIT KA NG RESIGNATION LETTER AND BE LIABLE IN CASE OF DAMAGES

( b ) An employee may put an end to the relationship 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 honor and person of the employee;

2. Inhuman and unbearable treatment accorded the employee by the employer or his
representative;

3. Commission of a crime or offense by the employer or his representative against the person of
the employee or any of the immediate members of his family; and

4. Other causes analogous to any of the foregoing.

Si ICO
3day period to stay is discretionary on the part of the employer and a shorter period may be
allowed.

Resignation can be withdrawn if

Period of submission ======================acceptance of er

withdraw anytime here

Pag tinanggap na ng employer yung resignation at na acknowledge na lagot ka na wala ng babalik

laway.

Are you entitled to separation pay if resignation is voluntary?

General rule, HINDI kay oy, unless may agreement cayo sa CBA na pwede kang bigyan in case mag
resign ka.

Constructive dismissal - forced resignation because the employment is rendered impossible or

unreasonable or unlikely to be complied with which is attributable to the employers act
amounting to dismissal but making it appear as if it is not. A dismissal in disguise.

IT also involves diminution of rank or pay.

Remedy, rainstatement with backwages. No reinstatement possible? Separation pay in lieu

reinstatement +full backwages

Preventive suspension - a mechanism used by the employer to protect an employee or his

co-employee or the business in case a situation called for such suspension to be imposed against
an employee. Any preventive suspension beyond 30 days is Constructive dismissal.

These are not CD:

Resignation to avoid dismissal

Voluntary resignation
Valid transfer

ART. 286. WHEN EMPLOYMENT NOT DEEMED TERMINATED

The bona fide suspension of the operation of a business or undertaking for a period not
exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not
terminate employment.

In all such cases, the employer shall reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not later than one (1) month from
the resumption of operations of his employer or from his relief from the military or civic duty.

RETIREMENT

(Retirement has been defined as a withdrawal from office, public station, business, occupation,
or public duty. )

If mag retire ka you are entitled to the benefits based on the law or CBA or any agreements
provided that the stipilated benefits in the agreements are not lower than that which is provided
by law.

What if no retirement plan?

In case of establisment employees

You can retire 60-65 and must have worked for the establishment for atleast 5 years.

1/2 a month of salary means:

15 days of work

1/12 of 13th month

5 days of incentive leaves

In case of mining employees

50-60 SAME BENEFITS

Not covered by this Article

1. if the following establishments employs more than

10 workers or employees:

Retail

Service

Agricultural establishment

2. Same to government establishments as such where employees are not regularly employed or
operations does not employ more than 10.

Covered

PRIVATE SECTOR

FULTIME - PARTIME

REGULAR - nonregular

Conditions for retroactive applications

We read Oro Enterprises as holding that R.A. N o . 7641 may be given

retroactive effect where —

(1) the claimant for retirement benefits was still the employee of the employer at the time the
statute took effect; and

(2) the claimant was in compliance with the requirements for eligibility under the statute for such
retirement benefits.

SEPARATION AND RETIREMENT PAY?

Yes they can be both awarded since the labor law does not preclude the recovery of other
benefits.

PRESCRIPTION

3 years for money claims from the time such cause of action accrues

1 year if prior effectivity of this code.

3 years for a case to be filed regarding offenses penalized under the labor code

1 year unfair labor practice from accrual of such unfair labor

What are the 4 kinds of separation pay?

The four kinds of compensation are, Statutory Benefit, As employment benefit or contractual
obligation , Alternative to reinstatement and finally for financial assistance.
S
Es
Alt
Fi
 GENUINO v NLRC

Promissory Estoppel

"Promissory estoppel may arise from the making of a promise, even

though without consideration, if it was intended that the promise should

be relied upon, as in fact it was relied upon, and if a refusal to enforce it

would virtually sanction the perpetration of fraud or would result in other injustice.

Promissory estoppel presupposes the existence of a promise on the part of one against whom
estopped is claimed. The promise must be plain and nambiguous and sufficiently specific so
that the court can understand

the obligation assumed and enforce the promise according to its terms.

In order to make out a claim of promissory estoppel, a party bears the burden

of establishing the following elements:

(1) a promise was reasonably expected to induce action or forbearance;

(2) such promise did, in fact, induce such action or forbearance; and

(3) the party suffered detriment as a result.