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Ch III EMPLOYMENT OF HOUSEHELPERS Coverage: all persons rendering services in household for compensation Domestic/household service services in the

e ERs home w/c is usually

necessary/desirable for the maintenance & enjoyment thereof and includes ministering to the personal comfort & convenience of the members or the ERs household, including services of family drivers

Contract shall not last for more than 2 years but may be renewed for such periods as may be agreed upon by the parties

Minimum Wage the basic cash wages in addition to food, lodging & medical P800/month in Manila, QC, Pasay, Caloocan, Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Paranaque, Las Pinas, Pasig, Marikina, Valenzuela, Taguig, Pateros in MM and highly urbanized areas attendance

P650/month for those in other chartered cities & 1st-class muns P550/month for those in other municipalities, provided, that the ERs shall review the ENT contracts of their househelpers every 3 yrs provided further, that those househelpers who are receiving at least P1k, shall be covered by the SSS w/ the end in view of improving the terms & conditions thereof

Assignment to non-household work

No HH shall be assigned to work in a commercial, industrial, agricultural enterprise at a wage/salary rate lower than that provided for agri/non-agri workers Opportunity for Education

If the HH is under 18, ER shall give him/her an opportunity for at least elementary educ. The cost of such educ shall be part of the HHs compensation unless there is a stipulation to the contrary Treatment of HH

ER shall treat the HH in a just & humane manner, NO physical violence Board, Lodging & Medical Attendance

ER shall furnish the HH free of charge suitable & sanitary living quarters as well as adequate food & medical attendance

Indemnity for unjust termination of services

If the period of service is fixed: neither ER nor the HH may terminate the contract before If the HH is unjustly dismissed, he/she shall be paid the compensation already earned of the contract the expiration of the term except for a just cause.

plus that for 15 days by way of indemnity, plus her salary for the unexpired portion

If HH leaves w/o justifiable reason, s/he shall forfeit any unpaid salary due him/her not exceeding 15days.

Service of Termination Notice

If the duration of the HH service is not determined either in stipulation or by the nature before the intended termination of the service ENT Certification

of the service, the ER or the HH may give notice to put an end to the relshp 5 days

Upon the severance of the HH service relation, the ER shall give the HH a written as HH.

statement of the nature & duration of the service and his/her efficientcy and conduct

ENT Records

ER may keep such records as he may deem necessary to reflect the actual terms & upon request of the ER.

conditions of ENT of his HH, w/c the latter shall authenticate by signature/thumbmark

Apex Mining Co Inc v NLRC amended the terms househelper or domestic servant Househelper/Domestic servant any person, whether male or female, who renders services in and about the ERs home and w/c services are usually exclusively to the personal comfort & enjoyment of the ERs family gardeners, houseboys and other similar househelpers necessary/desirable for the maintenance & enjoyment thereof; and ministers covers: family drivers, domestic servants, laundry women, yayas, (used synonymously)

HH/laundrywoman working in staffhouses of a company who attends facilities

to the needs of the companys guests & other persons availing of said driver, houseboy, gardener exclusively working in the company, the staffhouses and its premises CRITERION: the personal comfort & enjoyment of the family of the family of the ER in the home of said ER DIFFERENCE: s do not actually serve the family but a corporation, single proprietorship; service is rendered in the staffhouses/ business or domestic servant In relation to the Civil Code HH have the R: 1. not to be required to work more than 10hrs/day premises of the ER they are regular EEs and not merely a family HH

not only those of actual work but also the time during w/c their services are available to the ER, although not availd of); and

2. to 4 days/month vacation w/ pay SIL)

demandable even if helper is less than 1yr in service (as required for IN KIND; ER cannot insist on merely giving the monetary value

BUT if helper does not ask for the vacation in a month, the vacation for the monetary equivalent

days CANNOT be accumulated, and in such case, he would be entitled The head of the family shall bear the FUNERAL EXPENSES in case the HH dies If a HH is put to work in a commercial/industrial/agricultural enterprise he becomes How much medical attendance: no hard & fast rule but the financial capacity of the ER and length of service are factors to consider. entitled to wage prescribed by law for that of nonhousehold work. if the helper has no relatives w/ sufficient means.

CH IV. EMPLOYMENT OF HOMEWORKERS Regulated by the Sec of Labor.

ER of homeworkers includes any person, natural/artificial, who for his account/benefit, or on behalf of any person residing outside the country, in/directly or through an EE/agent/contractor/subcontractor or any other person:

1. DELIVERS, or causes to be delivered, any goods, articles or materials to be DISPOSED OF/ DISTRIBUTED in accdance w/ his directions; or

processed or fabricated in or about a home and thereafter TO BE RETURNED /

2. SELLS any goods, articles or materials to be processed/fabricated in or about a through some other person.

home and then REBUYS them after such processing/fabrication either himself or

Industrial Homework a system of production under w/c work for an ER/contractor is carried out by a homeworker at his home. Materials may/not be furnished by the ER/contractor

Different from regular factory production in that it is a DECENTRALIZED form of production, w/ very little supervision/regulation of methods of work

Home any room, house, apartment or other premises used regularly in whole/part as a DWELLING place, except those situated w/in the premises/compound of an ER or for the latter sub/contractor, and the work performed therein is under the active supervision by or

New Rule: DO#5

Authorizes the formation & registration of labor org of industrial homeworkers ER has duty to pay & remit SSS, Medicare & ECC premiums involving o o Moneyclaims for violations of labor standards and the terms & conditions of ENT 5k and below Regional director beyond 5k Labor Arbiter

BOOK 4: HEALTH, SAFETY & SOCIAL WELFARE BENEFITS Title 1: MEDICAL, DENTAL & OCCUPATIONAL SAFETY CH1: MEDICAL & DENTAL SERVICES FIRST-AID TREATMENT ER shall 1. keep in his establishment such 1ST AID MEDICINES & EQUIPMENT as the nature 2. take steps for the TRAINING of a sufficient number of EES in first aid treatment Emergency Medical & Dental Services & conditions of work may require

Free Medical & Dental Attendance & Facilities 1. for more than 50 up to 200 EEs: a. Services of a full-time RN

BUT if workplace is NOT hazardous & where no RN is available 2. for 50 EEs or less a. Services of a Graduate First-Aider

a. Sec of Labor shall provide regulations for the determination of the services required and if workplace is hazardous

3. for more than 200 up to 300 EEs: a. Full-time RN b. Part-time Physician c. Part-time Dentist d. an Emergency Clinic a. Full-time Physician b. Full-time Dentist c. Full-Time RN d. A Dental Clinic

4. For EVERY 100 EEs, when there are more than 300 EEs:

e. An Infirmary/emergency hospital w/ 1 bed capacity except when there is a hospital/dental clinic accessible (w/in 5kilometers or w/in 25-minute travel) from the establishment, & the ER makes arrangement for the reservation

therein of the necessary bends & dental facilities for the use of his EEs In cases of Hazardous workplaces: least 2hrs a day; (ER must provide the transport in emergency cases)

a. Part-Time Physician & Dentist must stay in the work premises for at b. Full-Time Physician & Dentist must stay at least 8 hrs

*Physicians & Dentists NOT necessarily EEs

*Physician in addition to his duties, shall develop & implement a comprehensive occupational health program for the benefit of the EEs of his ER

Qualifications of the Health Personnel Health

1. Must have the necessary training in Industrial Medicine and Occupational Safety & 2. Sec of Labor shall establish qualifications, criteria & conditions of their ENT

ER shall provide all the necessary assistance to ensure the adequate & immediate medical & dental attendance and treatment to an injured/sick EE in case of emergency

CH 2: OCCUPATIONAL HEALTH & SAFETY Duties of the Sec of Labor: 1. Appropriate orders, set & enforce mandatory occupational safety & health 2. Conduct continuing studies & research to develop innovative methods, techniques 3. Develop & implement training programs & approaches for dealing w/ occupational safety & health problems; standards and institute new and update existing programs;

4. Solely responsible for the admin & enforcement of occupational safety & health laws, regulations & standards. however, chartered cities may be allowed to conduct industrial safety inspections of establishments w/in their respective jurisdictions

5. May, through regulations, collect reasonable fees for the inspection of steam

boilers, pressure vessels and pipings, and electrical installations, and test and in the national treasury to the credit of the occupational safety & health fund

approval for safe use of materials, equipment and other safety devices deposited

ER required to observe safety standards & provide safety devices EE the IRs require proper use of these safeguards & devices A safety committee must be set up. DOLE Reg Ofc annual inspections

Title II: EEs COMPENSATION & STATE INSURANCE FUND Workmens compensation general & comprehensive term applied for those laws of a workmen through INDUSTRIAL ACCIDENT/CASUALTY/DISEASE.

providing for compensation for loss resulting from the INJURY/DISABLEMENT/DEATH

Compensation money relief offered according to the scale established under the statute as differentiated from compensatory damages recoverable in an action at law for breach of contract/tort

Amount of compensation determined in accordance w/ a definite schedule, based upon the LOSS OF EARNING POWER period a. Usually, payment of a specified amount at regular intervals over a definite b. May also include for furnishing of medical, surgical, hospital, nursing and burial services in addition to and independently of the payment of the compensation

Primary purpose: to provide compensation for disability/death resulting from occupational General Purposes: injuries/death of EEs (not ERs)

To improve the economic status of the workers; enforcement of court remedies;

To obviate the uncertainties, delay, expense & hardships attendant upon the To transfer from the worker to the industry in w/c he is employed, and ultimately to the consuming public, a greater proportion of the economic loss due to industrial accidents/injuries;

To improve relations bet ERs and EEs by avoiding/reducing the friction incident to litigation;

To provide, not only for EEs a remedy w/c is both expeditious and independent of proof of fault, but also for ERs a liability w/c is limited and determinate

Sources of Compensation:

1. Direct Payment by the ER directly to the EE

2. Insurance statutes require ER to take out insurance either a. w/ an insurance bureau operated by the state ; b. w/ a private company; c. to contribute to a compensation fund

and if an Ee is injured, the compensation is paid by the insurer/from the fund Compensation Fund -

(adopted by the LC)

all covered ERs are required to remit to a common fund a monthly contribution =

EE pays no contribution to the fund (agreement to collect contribution from the EE is prohibited) ERs contributions make up the State Insurance Fund, from w/c comes of work-connected injury/disease

1% of the monthly salary credit of every covered EE

the compensation to be paid to claimant EE or EEs dependents in case Procedure: In case EE is unable to earn because of injury/disease compensation is in the form of medical supplies & services In case of EEs death funeral benefits

1. When a work-related injury/disease befalls an EE; 2. He must notify his ER w/in 5 days 3. ER must in turn enter the notice in the logbook (not required in some cases) 4. w/in 5days after making the entry, ER must report to SSS/GSIS the injury/sickness is work-related or not) sickness/injury/death that he deems work-connected. (ER decides initially W/N

5. the claim goes to the SSS/GSIS, w/c decides on the claim ( SSS & GSIS serve as administering agencies of the Employees Compensation Commission (ECC), of denial by SSS/GSIS]) w/c is the policy-making body, and the appeal body.[appeal to ECC w/in 30 days 6. ECC decision if favorable to the workerfinal & executory (SSS/GSIS does not 7. Otherwise, may be brought up to CA usually appeal because it is represented in the ECC)

Definiton of Terms SSS Social Security System

GSIS Government Service Insurance System Employee -

a. any person compulsorily covered by the GSIS, including members of the AFP, and any person employed as casual, emergency, temporary, substitute or contractual, or

b. any person compulsorily covered by SSS Dependents -

1. the legitimate, legitimated, legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over 21, OR over 21, provided congenital/acquired during minority incapacitated and incapable of self-support due to physical/mental defect w/c is 2. the legitimate spouse living w/ the EE;

3. the parents of said EE wholly dependent upon him for regular support Beneficiaries

1. Primary:

a. the dependent spouse until s/he remarries; b. dependent children

2. Secondary (in the absence of primary beneficiaries) a. the dependent parents, restrictions) b. dependent children, the illegit children and legit descendants (subj to * the dependent natural child is considered primary when there are no other dependent children who are qualified & eligible for monthly income benefit

Injury any harmful changein the human organism from any accident arising out of and Sickness in the course of ENT

a. any illness definitely accepted as an occupational disease listed by ECC

b. any illness caused by ENT, subj to proof that the risk of contracting the same is increased by working conditions (ECC determines & approves occupational

diseases & work-related illnesses that may be considered compensable based on peculiar hazards of ENT)

Disabilty loss/impairment of a physical/mental function resulting from injury/sickness related benefits

Compensation all payments made under this Title for income benefits and medical or Income benefit all payments made under this Title to the EE/his dependents rehabilitation services and hospital care

Medical benefit all payments made under this Title to the providers of medical care, Related benefit all payments for appliances & supplies

Appliances crutches, artificial aids and other similar devices

Supplies medicine & other medical, dental or surgical items

Average monthly salary credit

(in the case of SSS)

sum of monthly salary credits in the 60-month period immediately preceding the semester of death/permanent disability by 60

(or more simply stated, average of the salary credits for 60 months) except where the month of death/permanent disability falls w/in 18 calendar months from the month of coverage, in w/c case

by the total number of calendar months of coverage

sum of all monthly salary credits paid prior to the month of the contingency

(or more simply stated, average of all monthly salary credits)

Average Daily Salary Credit 1. SSS sum of the 6 highest monthly salary credits in the 12-month period immediately preceding the semester of sickness/injury by 180

except where the month of injury falls w/in 12 calendar months from the 1st month of coverage (w/in the 1st year of coverage), in w/c case.

sum of all monthly salary credits

by 30 x the number of calendar months of coverage in the same period 2. GSIS Actual daily salary or the monthly salary

by the actual number of working days of the month of contingency Replacement Ratio 20% plus the quotient

(quotient: 340 + ave montly salary credit 300)

Monthly income benefit = plus

115% of (ave monthly salary credit x the replacement ratio) 1.5% of the ave monthly salary credit for each credited yr of service in excess of 10 yrs (monthly income benefit must not be less than P250)

Compensable work-related injury

- what gives rise to a compensation claim is either injury or disease, BUT, what is earning capacity

compensated is NOT the injury/disease itself, but the attendant loss/impairment of

Conditions for Compensability of Injuries memaid Injuries arising out of Refer to the origin/cause of the accident in the course of Refer to the time, place and takes place If it ensues from a risk reasonably sense due to the ENT incident to the ENT and if it is in some circumstances under w/c the accident Takes place w/in the period of the ENT,

at a place where the EE reasonably may is fulfilling those duties or engaged in

be in the perf of his duties, and while he

doing something incidental to, or where he is engaged in the furtherance of the ERs business If the ENT is one of the contributing happened would not have happened causes w/o w/c the accident w/c actually If it had its origin there in the sense that it was the end-product of a force/cause set in motion in the course of ENT

GR: IT IS NOT NECESSARY, in order for an injury to be regarded as having arisen or on premises w/in the control of the ER.

out of or in the course of ENT, that it should have occurred during hrs of active labor,

Employment includes not only the actual doing of the work, but also a reasonable

margin of time & space necessary to be used in passing to and from the place where the work is to be done, where the latter is expressly/impliedly included in the terms of ENT

Proximate Cause - that acting first and producing the injury either immediately or by

setting other events in motion. They constitute a natural & continuous chain of events, each having a close causal connection w/ its immediate predecessor. The final event in the chain immediately effecting the injury is a natural & probable result of the cause should, as an ordinarily prudent & intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom

w/c first acted, under such circumstances that the person responsible for the first event

Belarmino v ECC: a classroom teacher, while 8months pregnant accidentally slipped & fell on the classroom floor, and prematurely delivered. She died from an infection of her lacerated wounds from the delivery SC: death was caused by accident in the course of her employment

Hinoguin v ECC: Sgt Hinoguin was given oral permission by his commander to go

outside the workplace to settle an important matter when he was accidentally shot by a fellow officer. SC: A soldier on active duty is really on duty 24 hrs a day except when shot, he was still considered in the perf of his duties (arising out of) 24hr Doctrine when he is on vacation leave status. Eventhough he was outside his place of detail

GSIS V CA & Alegre: a police officer while on duty was driving his tricycle and ferrying passengers in the vicinity of his workplace when he got into an altercation w/ a fellow officer and was shot to death. SC: Although he is on duty and at the workplace, he was performing a personal task. Not compensable

Conditions for the injury to be the result of and ENT accident (must satisfy all): 2. EE must have been performing his official functions; for the ER.

1. EE must have been injured at the place where his work requires him to be; 3. If the injury is sustained elsewhere, the EE must have been executing an order

Nutura case: a member of the Ph Army, at the time he met his death was instructed attending a dance party. But on his way back to the camp, he fell from the bridge and died. he was executing an order.

by his commander to check on several personnel of his command post who were than

ECC v CA: Sgt Alvaran, a Mandaluyong police was assigned to the Pasig Provincial Jail. But at the time of his death, he was at the police station because he took his son for interview for being involved in a stabbing incident. There he was shot by another policeman. The GSIS & ECC denied the claim for death benefits on the

ground that at the time he was shot, he was acting as a father to his son and he father but as a peace officer & is therefore in the perf of his duties. Valeriano v ECC:

was in a place where he was not required to be. SC: he was not merely acting as a

his way home, met a vehicular accident while on his way home. SC: he was neither at his workplace nor in pursuit of orders of his superiors when he met the accident, and he was not doing an act w/in his duty & authority as a firetruck driver. Not compensable.

Valeriano was a fire truck driver. He met a friend for dinner and on

Ingress-Egress/Proximity Rule

GR: in the absence of special circumstances, an EE injured in, going to, or coming from, his place of work is EXCLUDED from the benefits of the WCA. : 1. Where the EE is proceeding to or from his work on the premises of his ER; the exclusive or customary means of ingress and egress; 2. Where the EE is about to enter/about to leave the premises of his ER by way of

3. Where the EE is charged, while on his way to or from his place of ENT or at his 4. Where the ER, as an incident of the ENT, provides the means of transportation to and from the place of ENT. home, or during his ENT, w/ some duty or special errand connected w/ his ENT;

Going to or Coming From Work Rule

An injury or death of a covered member in an accident while he is going to or coming from the workplace, shall be compensable, provided the FF conditions are established definitively:

1. The act of the EE of going to, or coming from the workplace must have been a CONTINUING ACT, that is, he had NOT been diverted therefrom by any other and activity, and he had NOT departed from his usual route to or from his workplace; 2. Re: an EE on a special errand, the special errand must have been official and inconnection w/ his work

Direct Premises Rule :

GR: the accident should have occurred at the place of work 1. The Coming-Going Rule

2. The Ingress-egress/proximity Rule

3. Incidents of ENT injuries sustained in connection w/ acts w/c are reasonable incidental to the ENT are deemed as arising out of such ENT. It includes: a call of nature a. Acts of Ministration those done by a person for the purpose of satisfying i. Rest/refreshment

ii. Lunch period if injury results from an independent act of the EE having no connection w/ his work or his meal or if the EE at the time was in a place where he had no R to be not compensable

when a Union mtg was held during a lunch period

b. Acts for the benefit of the ER while discharging some duty he is authorized/directed to perform i. Injuries occurring during temporary stoppage/cessation of work compensable, arising out of

iv. Voluntary assistance to a fellow EE

iii. Repair of equipment of ER

ii. Act of saving the ERs property from an apparent danger

v. While EE is at his own home or upon his own premises, in connection w/ the perf of the duties of his ENT

c. Acts done to further the goodwill of business e. Acts in emergencies i. Rescue work

d. Slight deviations from work, from curiosity or otherwise;

4. Extra-Premises Rule (Shuttle bus Rule) 5. Special Errand Rule 6. While living, boarding or lodging on premises of ER, or at Working place

pursuant to an express/implied requirement of the contract of hiring, if reasonable attributable or incidental to the nature of the ENT or to the conditions under w/c he lives in the perf of his duties but not compensable where such residence on the ERs premises is merely permissive and not required, or incidental to the ENT where the injury results from a risk/danger w/c is not reasonable

7. While traveling depends upon

a. whether the injury results from a risk w/c is inherent in the nature of the exposed,

ENT, or w/c is reasonably incidental thereto or to w/c the EE is specially

b. whether the exercise of some functions/duties reasonably

necessary/incidental to the perf of the contract of ENT, or if not actively such contract to be

engaged, whether he was at a place where he was authorized/required by GR: An EE who is away from home on a business trip for his ER is under For Traveling Salesmen: covers both the time & place of the traveling as well as * Even if EE uses his own vehicle compensable, if while in the perf of his of the selling goods. continuous WC coverage from the time he leaves until he returns home.


extent, purpose, or effect thereof. If deviation is unauthorizednot compensable

*Effect of DEVIATION from route/ schedule/mode of travel depends upon the

on a trip undertaken for the benefit of the ER even if in the course thereof, the EE pursues also a personal purpose. Subj to the ff GUIDELINES: a) Deemed in the course of if the trip involves the perf of a service for the ER, w/c would have caused the trip to be done by someone else, even if such a trips, trips to & from work and to miscellaneous errands motivated by the b) When a trip tends to serve BOTH business & personal purposes, it is considered: i. a. Personal trip intention of the EE to transact official business during such trips trip had not coincided w/ a personal purpose (applies to out-of-town trips, field

* Dual Purpose Doctrine compensable for an injury that the EE sustains while


of the business/official purpose OR,

if EE would have made such a trip, in spite of the failure/absence

if the EE would not have made the trip because of the failure of purpose

the private purpose thereof and the nonfulfillment of the business

b. Business trip if the EE would have made the trip nonetheless, despite c) Whether a trip to be taken by an ee in the interest of both the EE and his ER is to be regarded as the EMPLOYERs TEST: if the work of the EE tends to create a necessity for travel, he is deemed in the course of ENT, albeit he serves at the same time some purpose. REQUIREMENT: at least a concurrent cause of the trip of the EE TEST: Whether the recreation was for the EEs exclusive benefit, or whether the ER had some interest in the activity Special Engagement Rule recreational activities (covers field trips, failure/absence of the private purpose thereof

8. ER- Sponsored Activities

intramurals, outings and picnics initiated/sanctioned by the ER

9. Acts of God/Force Majeure

GR: ER is not responsible

: Positional and Local Risks Doctrine if an EE, by reason of his duties, is than that to w/c other persons in the community are exposed

exposed to a special or peculiar danger from the elements, that is one greater

10. Assault although resulting from a deliberate act of the slayer is considered an accident w/in the meaning of WCA a. Arising from a quarrel over work compensable

Increased Risk Jobs

b. Resulting from resentment, having its origin in the work compensable a) Jobs having to do w/ keeping the peace or guarding property;

b) Jobs having to do w/ keeping or carrying of money w/c subj the EE to c) Jobs w/c expose the EE to direct contact w/ lawless and irresponsible d) Work as bus driver, taxi driver or street car conductor members of the community (ie. Bartender); the risk of assault because of the increased temptation to robbery;

11. NPA Victims presumptive compensability Effects of Violation of Rules

GR: Acts w/in the sphere of ENT but carried out in violation of some ER-promulgated a. Where the violation did not bring about the cause of the accident rules are compensable..

b. Where there was serious doubt that the prohibition was known to the EEs injured c. Where the violation was not intentional but due to carelessness/negligence Horseplay during work compensable

Not compensable if the injury results from intoxication WON a company rule is violated

Sickness -

To be occupational, the disease must be one due wholly to causes and conditions w/c are normal and constantly present and characteristic of the particular eliminate occupation; those things w/c science & industry have not yet learned how to

If the illnesses are not occupational diseases, the claimant must present proof that he contracted them in the course of his ENT. He who alleges a fact has the burden of proof.

* ER has the duty to require preemployment examination of all prospective EEs and to provide periodic medical exams of EEs exposed to occupational diseases

Theory of Increased Risk

If an ailment is not included in the list of occupational diseases by the ECC, the claimant has the burden of proving that the nature of the work increased the risk of contracting the same

Specific Diseases

1. Adenocarcinoma of the Ileocaecal Junction no proof necessary 2. Asbestosis, provided: a. EE must have been exposed to asbestos in the workplace b. Chest xray must show findings of asbestos filed w/in 3 yrs c. If ailment is discovered after retirement/separation, claim therefor must be 3. Bangungot, if the requirement of proof of causal link bet ailment and working 4. Bells Palsy, anxiety neurosis, peripheral neuritis not included; claimant must 5. Pancreatic Cancer not compensable, unless it can be shown that it was caused 6. Stomach cancer not included not by specific working conditions prove he contracted them in the course of ENT conditions is proved

7. Carcinoma of the Breast w/ metastases to the gastrointestinal tract and lungs 8. Cardiovascular failure depends on its probability that the work caused/aggravated 9. Chronic glomerulonephritis not 10. Chronic osteomyelitis not 11. Anemia Pulmonary cancer not the illness

12. Incomplete abortion compensable 14. Peptic ulcer not

13. Leprosy if risk is increased by working condition 15. TBoccupational for teacher, laborer, driver, land inspector and similar occupations Evidence: Degree of Proof is required.

If disease is listed in the Table of Occupational Diseases of ECC, no proof of causation

If not listed, the EE assisted by his ER is required to prove a positive proposition, that Proof of direct causal relation not indispensable, EE may sufficiently adduce proof of reasonable work connection. is, that the risk of contracting the disease is increased by the working conditions.

*Proof is required ONLY if cause is unknown old doctrine no longer applicable NEW doctrine: Proof is required.

Proof of Increased Risk: 2 Approaches

1. If a claimant cannot prove the necessary work connection because the causes of the disease is still unknown, it must be presumed that working conditions increased the risk of contracting the ailment. compensable.

2. If there is no proof of the required work connection, the disease is not

Ch II COVERAGE & LIABILITY Coverage of Employees Compensation Law 1. All ERs, public or private a. Casual 2. All EEs, public or private, including: b. Emergency

c. Temporary or substitute EEs e. AFP members

d. Filipinos employed abroad, subj to regulations by ECC EEs Coverage up to 60y/o or over 60, if he had been paying SSS/GSIS contributions prior to age 60 and has not been compulsorily retired

Effectivity Date of Coverage

ER from the 1st day of operation EE from the 1st day of ENT

Registration - required for each ER and his EEs


GR: ECL is intended to assist innocent victims of ENT accident or work-related illness. : Self-inflicted/self-courted contingencies 1. Intoxication/drunkenness being under the influence of intoxicating liquor to the act, words, or conduct is visibly impaired

extent that one is not entirely himself or so that his judgment is impaired and his

2. Self-inflicted injuries due to willful or deliberate intent on the part of the EE to of his foolish act)

injure himself (not merely a failure to realize the probable consequences to himself a. Suicide or provoked death

Mabuhay Shipping Services Inc & Skippers Maritime v NLRC: the ER is

exempted from liability for burial expenses for a seaman who commits suicide. The same for one who ran amuck or who in a state of during the term of his ENT does not give rise to compensation having ended, was returning to the PH but, during a stopover, intoxication provoked a fight as a result of w/c he was killed, even

Interorient Maritime v Pineda: a seaman who, his job contract in Dubai

wandered on the streets of Bangkok. He brandished a knife at ppl, death was the result of his willful act, he was found to have been

including a policeman who reacted by shooting him dead. Although his suffering from mental disorder (he was deprived of reason), and his will was impaired. It was a qualification/exemption from the self-inflicted or deliberate willful act rule and the ER was held liable. The obligs and liabilities of the ER do not end upon the expiration of the contracted hire to terminate the contract of ENT.

period as they are duty-bound to repatriate the seaman to the point of

Suicide: When compensable: When stipulated in ENT Contract

NAESS Shipping v NLRC: While on board the ship, Dublin, the chief

steward fatally stabbed the 2nd cook during a quarrel, and then ran to the deck from w/c he jumped or fell overboard. The body was never death compensable, by virtue of the special agreement in the ENT recovered. The POEA and NLRC rendered judgment holding Dublins contract entitling a crewman to compensation for loss of life. The

contract is the law bet private parties and it entitles Dublins widow to death benefits as long as his death happened while serving out his contract of ENT.

American Authorities: Suicide is compensable in the ff cases: injury/disease; disease.

1. When it results from INSANITY resulting from compensable work 2. When it occurs during a DELIRIUM resulting from compensable

Self-destruction is NOT presumed. The presumption is based on the instinct 3. Notorious Negligence something more than simple/contributory negligence. It signifies a deliberate act of the EE to disregard his own personal safety. (Not merely disobedience to rules, if there is no intention to end his life) A driver injured by collision while overspeeding on a descending slope approaching a curve w/ the front view obstructed by vegetation Primary Consideration for NOT finding Notorious Negligence: the existing danger; or of self-preservation.

a. Lack of knowledge or awareness of the peril or the seriousness of b. The unexpectedness, under the circumstances of the accident.

NOT Notorious Negligence: momentarily forgets it

Failure to avoid a known danger by a laborer engrossed in his work who Failure to exercise incessant vigilance in avoiding a known danger; EEs disregard of warning that the banca was overloaded backwards Laborer injured while boarding rear platform of train as it was moving

Notorious Negligence Cases:

Solidum v GSIS: Solidum was a marine assigned in Zamboanga.. While

resting after a patrol mission, he jokingly challenged his comrades to a

duel but they all ignored him. Pointing the muzzle of his loaded rifle at his temple and saying Bahala na, he squeezed the trigger, killing himself instantly. GSIS denied the death benefits claim by the deceaseds father because he was not performing his duties as a soldier when he died. Moreover, his death was caused by his own notorious negligence.

citing that the contingency did not arise out of and in the course of ENT

Estioko v GSIS: Estioko was a corporal of the Ph Army assigned in Fort

Bonifacio until his death at the age of 25. While off-duty, he volunteered to

clean another soldiers firearm in the barracks. In the process of cleaning it,

he cocked the pistol, pointed the barrel to his right temple and squeezed the trigger. Unfortunately, it was loaded, and he died. The ECC ruled against granting the compensation, stating that even though Estioko was notorious negligence when he tested the firearm by firing it against his temple. As a soldier, he should have known the basic standard safety procedures in handling firearms. NOT Notorious Negligence Cases

cleaning a pistol when he shot himself, it was not accidental. He acted w/

Quizon v GSIS: Quizon was a soldier who died while testing a dynamite that was confiscated by them. After asking permission from his unit, he took a civilian pumpboat and proceeded towards a nearby island. But along the way, he accidentaly ignited the fuse, causing the dynamite to explode

prematurely, instantly killing him. His fathers claim for his death benefits

was denied by the GSIS because aside from his notorious negligence, he

was not performing his duties at the time of the accident. The SC, although finding negligence on the part of Quizon, stated that it was NOT notorious. Considering the soldiers training on explosives as a ranger, his desire to

test the dynamite is but a natural reaction on his part to the extent that he the perf of his duties as a member of the Ranger Training Group, and under the permission of a superior.

even ignored the advise of his colleague against his plan. He was acting in

Art 173. EXTENT OF LIABILITY Rules on Simultaneous Recovery

1. Simultaneous recovery under the LC and the CC cannot be made. The action is is made, the claimant cannot opt for other remedy.

selective and the EE may choose to file the claim under either. But once the election

2. Simultaneous recovery under the LC and the SSS can be made. (DOJ Opinion #8) since PD 1921 has lifted the ban on simultaneous recovery.

RA7699 institutes a scheme for totalization and portability of SS benefits. A covered

worker who transfers ENT from one sector to another or is employed in both sectors shall have his creditable services or contributions in both Systems credited to his service contribution record in each of the Systems and shall be totalized for the

purposes of old-age, disability, survivorship and other benefits in case the covered Provided, however, that overlapping periods of membership shall be credited only once for totalization.

member does not qualify for such benefits in either or both Systems w/o totalization.

Recovery under the WCA or under the CC

Ysmael Maritime Corp v Avelino:RGL, a licensed 2nd mate, on board a vessel owned

by YMC, perished when the vessel ran aground and sank. His parents sued YMC for damages. YMC alleged that claimants had alrdy been compensated by the WCC for the same incident, for w/c reason they are now precluded from seeking other opinions on the exclusivity rule: remedies against the same ER under the CC. SC was confronted w/ 3 divergent

1. The injured EE or his heirs, in case of death, may initiate an action to recover damages (not compensation under the WCC) w/ regular courts on the basis of negligence of the ER pursuant to the CC; in accordance w/ Sec.5 of the WCA;

2. Robles case: the remedy of an EE for work-connected injury/accident is exclusive 3. The action is SELECTIVE and the EE or his heirs have a choice of availing

themselves of the benefits under the WCA or of suing in the regular courts under the CC for higher damages from the ER by reason of his negligence. But once other remedy. The EE cannot pursue both actions simultaneously. election has been exercised, the EE or his heirs are no longer free to opt for the

RGLs parents cannot be allowed to recover addtl damages under the CC. They had previously filed and had received the compensation under WCA.


3rd Party one upon whom no liability could entail under the law; one who is not an ER of the injured EE or a stranger to the ENT relshp and who may be held liable at common law for his negligence w/c results in an injury to the EE Legal Subrogation

When the disability/death is caused by circumstances creating a legal liability against

a 3rd party, the disabled EE or the dependents in case of his death shall by paid by shall be SUBROGATED to the Rs of the disabled EE or the dependents in case of his death, in accordance w/ general law. Excessive Recovery

the System (SSS/GSIS as the case may be). In case the benefit is paid, the System

Where the System recovers from such 3rd party damages in excess of those paid or allowed under the law, such excess shall be delivered to the disabled EE or other System. persons entitled thereto, after deducting the cost of proceedings and expenses of the

Double Recovery

The injured EE cannot claim payment twice for the same injury from both the 3rd party and the System.


Except as otherwise provided under this Title, no contract, regulation or device

whatsoever shall operate to deprive the EE or his dependents of any part of the

income benefits, and medical or related services granted under this Title. Existing enjoyed by their EEs.

medical services being provided by the ER shall be maintained and continued to be

Ch III ADMINISTRATION Art 176. EEs COMPENSATION COMMISSION (ECC) Composed of o o o o o o Sec of DOLE Chairman GSIS Gen Mgr

4 Ex-officio members:

SSS Administrator

Chairman of Ph Medical Care Commission Exec Dir. Of the ECC Secretariat

2 Appointive members:

2 members appointed by the President for a term of 6yrs. (1 rep of the SS programs.

EEs and 1 rep of the ERs) must have at least 5yrs experience in WC or Vice Chairman shall be alternated each yr bet the GSIS Gen Mgr and the SSS Admin. Quorum: presence of 4 members

Salary: per diem; P200 for every mtg that is actually attended by him, exclusive of actual, ordinary and necessary travel & representation expenses. on full-time basis Representative in absence of any Member: an official of the institution he serves CEO of GSIS/SSS shall be responsible for the gen conduct of the operations and mgt functions of the System; and for carrying out the policies of the ECC ECC Status a govt corp attached to the DOLE for policy coordination & guidance.

ECC is the policy-making body of the EC Program and also the appeal body.

The decisions of either SSS/GSIS if unfavorable to the claimant, are appealable to review.

the ECC. Upon appeal, the system elevates the record of the case to the ECC for

The ECC has 3 Thrusts/Components:

1. PREVENTIVE THRUST the mission is to minimize & control hazards in the working envt. 2 agencies are involved in this program premises a. Bureau of Working Conditions (BWC) of the DOLE inspects work b. The Occupational Safety & Health Center (OSHC) - trains safety engineers, To force the observance of the legal reqmt on occupational health & safety, working envt will be liable to 25% of benefits due the claimants tests safety equipmt and undertakes research work

the establishments having a high rate of incidents caused by hazards of their 2. COMPENSATIVE THRUST the heart of the EC Program. The ECC through the GSIS/SSS pays benefits to govt & private sector workers who suffer workconnected contingencies.

3. CURATIVE THRUST the ECC does not only take the responsibility for the may suffer in line of duty as well as the rehab of those who are disabled.

benefits due the workers, but also the treatment of sickness/injury that a worker

For medical services, the ECC conducts accreditation of qualified physicians, treatment.

clinics and hospitals where EC patients may be referred to for admission and

Rehab services consist of medical, surgical or hospital treatment, incl. appliance. 2 Separate Funds

All revenues collected for the EC Program shall accrue to SEPARATE SIFs established in 2 different govt entities, namely the GSIS and the SSS.. , ECC may not augment the SIF in one System w/ funds from the other System.


a. Beginning as of the last day of the month when an EEs compulsory coverage remit to the Sys a contribution equivalent to 1% of EEs monthly salary credit

takes effect and every month thereafter during his ENT, his ER shall prepare to

b. Rate of contribution reviewed periodically and, subj to the limitations herein anticipated as well as unexpected losses, may require;

provided, may be revised as the experience in risk, cost of admin, and actual or

c. Contributions shall be paid in their entirety by the ER and any contract/device for the deduction of any portion thereof from the wages or salaries of the EEs shall be null and void;

d. When a covered EE dies, becomes disabled or is separated from ENT, his ERs of the month of contingency and during such months that he is not receiving wages/salary.

oblig to pay the monthly contribution arising from that ENT shall cease at the end


The RP guarantees the benefits prescribed under this Title and accepts general covered by supplemental appropriations from the national govt.

responsibility for the solvency of the SIF. In case of deficiency, the same shall be

Amended rules on EC specifies 10 brackets of monthly salary credits on w/c to The same rules provide the penalties to the ER who is delinquent in paying ECC contributions, w/c include imprisonment and/or fine and a 3% penalty per month from the date the contribution falls due until paid. base the 1% contribution to ECC


a. Medical services, appliances and supplies - provided by the System

immediately after an EE contracts sickness or sustains an injury and during the subsequent period of his disability, as the nature of his sickness/injury

and progress of his recovery may require, subj to the expense limitation b. Rehabilitation services prescribed by ECC (Art 185)

2. Cash Income Benefit or Pension due to: a. Temporary total disability b. Permanent total disability d. Death

c. Permanent partial disability

EE is entitled to the benefits only for the ward services of an accredited hospital and accredited physician. ECC accredited hospitals & physicians admission. treatment.

are NOT allowed to ask any deposit from EC patients as requisite for Neither are they allowed to collect any amt from EC patients as charges for However, they are privileged to claim reimbursement w/ the ECC through the ICU expenses are reimbursed 100%)

System for expenses incurred in the treatment of EC patients (Medicines and

Reimbursement of Medical Expenses

SIF has the duty to provide the EE w/ such services, appliances and supplies as the System fails to promptly furnish the same, such services, appliances and supplies EEs R of reimbursement for medical expenses is NOT extinguished upon his may be acquired by the EE himself, at the expense of the SIF/System.

nature of his sickness/injury and the progress of his recovery may require BUT if the

deathtransmitted to legal heirs unless they are essentially personal in nature or

the law declares them to be so. (not only those incurred for the primary illness but even those for its complications even if the complications developed after the EEs retirement)

CASE: Medical Expenses for Complications

Alvero v GSIS: Alvero was Justice of the Peace in Quezon. He became Asst.

Provincial Fiscal and then promoted to the position of RTC Judge. He retired on Apr 8, 1984 at the age of 63. For all his compensable ailments (PTB, Moderately was granted: advanced w/ Pulmonary Emphysema and Chronic Obstructive Pulmonary Disease) he

a) temporary total disability benefits from Jan 4-19, 1984; and

b) permanent total disability benefits from Apr 8, 1984 to Dec 1988. incurred for Diabetes Mellitus and Gastritis.

Not satisfied w/ this, he also requested for the reimbursement of medical expenses

medical expenses of primary therapeutic value w/c pertain to the approved illness at the time of his separation from the service were allowed for reimbursement. Medical expenses incurred due to complications that appeared after he had retired from the service and those w/c are of preventive value, (per Medical Evaluation and

The System denied his request for reimbursement on the ground that only those

Underwriting Group-GSIS policy), were excluded. The Sys further alleged that he had alrdy availed of permanent total disability benefits, consisting of reimbursement of as hospitalization benefits. medicines, medical supplies, lab exams, professional fees for claimed ailment as well

Emphysema were brought about by the intake of medications like steroids, antibiotics treating the complications, Diabetes and Gastritis (stomach ulcer)

RULING: The complications that arose from Alveros primary illnesses PTB and

and diuretics. For this reason, he is entitled to reimbursement of medications used in

Art 186. LIABILITY. The System shall have the authority to choose/order a change of physician, hospital or rehab facility for the EE, and shall NOT be liable for compensation for any aggravation of the EEs injury/sickness resulting from rehab facilities or physicians.

unauthorized changes by the EE of medical services, appliances, supplies, hospitals,

The oblig to provide medical services lasts from as long as the EE is sick (during the period of disability) of a compensable illness, and this duty is not ended when ENT terminates.

The law does not provide a maximum either in the amt to be paid or the time period w/in w/c such R may be availed of by the EE. It is as much medical may be charged against the SIF and are to be paid by the System. expenses as may be necessary until the work-connected injury/sickness ceases, Prevailing Rule in Compensation Cases: Acts not containing any limitation as to the period during w/c the ER may furnish/pay for medical, surgical, or hospital services have been construed as imposing liability on the ER as long as such

services are required to cure/relieve the injured EE from the effect of his injury.

Art 187. ATTENDING PHYSICIAN. Any physician attending an injured/sick EE shall

COMPLY w/ all the regulations of the Sys and SUBMIT reports in prescribed forms relevant to the particular injury/sickness shall on demand be made available to the w/c compensation is sought shall be considered as privileged communication.

at such time as may be required concerning his condition/treatment. All medical info EE or the System. No info developed in connection w/ the treatment/examination for


refuses to submit to medical exam or treatment, the Sys shall STOP the PAYMENT unreasonable refusal shall be determined by the Sys w/c may on its own initiative or to be furnished.

of further compensation during such time as such refusal continues. What constitutes determine the necessity, character and sufficiency of any medical services furnished

Art 189. FEES & OTHER CHARGES All fees and other charges for hospital services, medical care and appliances including professional fees shall NOT be higher than general and subj to the regulations of ECC. Professional fees shall only be those prevailing in wards of hospitals for similar services to injured/sick persons in appreciably HIGHER than those prescribed under the Ph Medical Care Act of 1969. Art 190 REHABILITATION SERVICES

a) The System shall, as soon as practicable, ESTABLISH a continuing program for the rehab of injured and handicapped EEs, who shall be entitled to rehab services, w/c shall consist of medical, surgical or hospital treatment, including physically independent.

appliances if they have been handicapped by the injury, to help them become b) As soon as practicable, the Sys shall establish centers equipped and staffed to provide a balanced program of remedial treatment, vocational assessment and preparation designed to meet the indiv needs of each handicapped EE to restore him to suitable ENT, including assistance as may be w/in its resources to help each rehabilitee to develop his mental, vocational or social potential.

Rehabilitation Services include a balanced program of remedial treatment, vocational EE to restore him to suitable ENT, incl assistance as may be w/in its resources to help each rehabilitee develop his mental, vocational or social potential.

assessment and preparations designed to meet the indiv needs of each handicapped

3 Stages of Rehabilitation

a) PHYSICAL REHABILITATION involves physical therapy by the rehab center of ECC

the ECC-accredited hosp, furnishing of prosthesis and appliances all paid by the

b) VOCATIONAL ASSESSMENT involves evaluation by guidance psychologist of gainful ENT

the ECC and sending to vocational school of those found ready to reengage in

c) VOCATIONAL PLACEMENT involves job placement by ENT Service Officer to help him become independent and gainfully employed.

Ch. VI. DISABILITY BENEFITS Disability does not refer to the injury nor to the pain & suffering it has occasioned, but to the loss/impairment of earning capacity. There is disability when there is a

loss/diminution of earning power because of actual absence from work due to the Basis of compensation: reduction of earning power injury or illness arising out of and in the course of ENT.

Thus, even if an EE suffers a service-connected injury/illness as long as he goes on

working wlo any reduction whatsoever in his earning capacity, there is no disability.

3 Distinct Categories of Disability

a. Temporary Total Disability (TTD)

b. Permanent Total Disability (PTD)

c. Permanent Partial Disability (PPD) Total Disability may either be temporary or permanent. -

does not mean a state of absolute helplessness, but means disablement of an EE to earn wages in the same kind of work, or a work of similar nature, that he was trained for or accustomed to perform, or any kind of work w/c a person of his mentality and attainment could do.

Object of compensation is to compensate the injured laborer/EE for the actual and permanent loss of a member of the body, or the use thereof.

Art 191. TEMPORARY TOTAL DISABILITY Amount of Benefits: equivalent to 90% of his ave. daily salary credit per day, subj to 1. from P10-P90 for a continuous period not exceeding 120 days for the same the ff conditions:

disability, UNLESS the injury/sickness requires more extensive treatment that lasts beyond 120 days, but NOT to exceed 240 days from onset of disability, in w/c case he shall be paid benefit for TTD during the extended period. monthly medical report certified by its attending physichan.

2. The monthly income benefit shall be SUSPENDED if the EE fails to submit a The maximum for daily income benefit for TTD is INCREASED to P200 by ECC board resolution on Oct 10, 1996, Effective Nov 1, 1996.

Period of Entitlement the income benefit shall be paid beginning on the 1st day of consecutive days, except where such injury/sickness still requires such medical

such disability. If caused by an injury/sickness, it shall not be paid longer than 120 attendance beyond 120days but not to exceed 240 days from the onset of disability,

in w/c case, the benefit for TTD shall be pd. However, the Sys may declare the total Relapse after an EE has fully recovered as duly certified, the period covered by any relapse, w/c results in disability and is determined to be compensable, shall be considered SEPARATE from the pd covered by the original disability. and permanent status at any time after 120 days of continuous TTD.

Magsaysay Maritime Corp Case: If the 120 days initial pd is exceeded and no
the seafarer requires further medical attention, then the TTD period may be

declaration of the workers fitness of permanent disability to work is made because EXTENDED up to a MAXIMUM of 240 Days, subj to the R of the ER to declare w/in this period that a permanent partial/total disability already exists.


If as a result of the injury/sickness, the EE is unable to perform any gainful occupation for a continuous period for more than 240 days. EE shall be paid by the System per month, an amount equivalent to the

monthly income benefit PLUS 10% thereof for each dependent child up to 5yrs income benefit shall be the new amt of the monthly benefit for all covered pensioners, effective upon approval of this decree -

old, beginning w/ the youngest and w/o substitution. Provided, that the monthly

The Monthly Income Benefit (MIB) shall be guaranteed for 5yrs and shall be suspended if: a) the EE is gainfully employed, or

b) recovers from his PTD, or

c) fails to present for examination at least once a yr upon notice by the of LOIs. PTDs

System except as otherwise provided for in other laws, decrees, orders

1. A disability acknowledged by the company as PTD w/in the periods allowed by 2. Upon expiration of the maximum 240-day treatment period w/o a declaration of 3. Complete loss of sight of both eyes; either fitness to work or the existence of a permanent disability; law (120 days, extendible to 240 days);

4. Loss of 2 limbs or above the ankle or wrist; 5. Permanent complete paralysis of 2 limbs; 6. Brain injury resulting in incurable imbecility or insanity; and

7. Such cases determined as determined by the Medical Director of the System and approved by the ECC.

Period of Entitlement the full monthly income benefit shall be paid for all compensable months of disability

Suspension of Income Benefits under any of the FF conditions: notice by the System;

a. Failure of the EE to present himself for examination at least once a yr upon b. Failure to submit a quarterly medical report certified by the attending physician; c. Complete or full recovery from his permanent disability; or d. Upon being gainfully employed

Amount of Benefits

1. In the case of SSS Any EE entitled to PTD benefit shall be paid by the System a Monthly Income Benefit a. The # of months of paid coverage shall be the # of monthly contributions remitted to the System including contributions other than for EC if paid compensable months of disability. before March 31, 1975. The full monthly income benefit shall be paid for all b. The first day preceding the semester of TTD shall be considered for purposes of computing the monthly income benefit for PTD.

Amt of Benefit for Dependent Children each dependent child up to 5y/o,

counted from the youngest and w/o substitution, shall be entitled to 10% of the MIB of the EE. ( n/a to causes of action w/c accrued before May 1, 1978)

Aggregate Monthly Benefit Payable Except the benefit to dependent children,

the aggregate monthly benefit payable in the case of GSIS, shall in no case his PTD.

exceed the monthly wage/salary actually received by the EE as of the date of

Art 193. PERMANENT PARTIAL DISABILITY (PPD) if as a result of the his body, (for not more than the period designated):

injury/sickness, the EE suffers a permanent partial loss of the use of any ff part of



(MONTHS) 1 thumb 1 index finger 1 middle finger 1 ring finger 1 little finger 1 big toe Any toe 1 arm 1 hand 1 foot 1 leg 1 ear Both ears Hearing of 1 ear Hearing of both ears Sight of 1 eye 10 8 6 5 3 6 3 50 39 31 46 10 20 10 50 25

Amount of Benefits a MIB for the # of months indicated. If the indicated # of months exceeds 12, the income benefit shall be paid in monthly pension; otherwise, the System may pay income benefit in lump sum or in monthly pension.

Effect of Gainful ENT for PPD, a covered EE shall continue to receive the benefits, even if he is gainfully employed and receiving his wages/salary

PTD Invariably results in an EEs loss of work or inability to perform his usual work

PPD Occurs when an EE loses the use of any particular anatomical part of his body w/c disables him to continue w/ his former work

TEST of PTD: a showing of the capacity of the EE to continue performing his work

notwithstanding the disability he incurred. Thus, if by reason of the injury/sickness the EE is unable to perform his customary job for more than 120 days and he does not come w/in the coverage of what constitutes TTD, then the said EE undoubtedly body. suffers from PTD regardless of whether or not he loses the use of any part of his


Orlino v ECC: Suffering from mental lapses w/c made him unfit for work, Orlino was not been able to work nor engage in any gainful ENT.

forced to seek early retirement at the age of 55y/o. from that time to present, he has RULING: He is considered permanently & totally disabled to work when he was

incapacitated/disabled to perform any substantial amt of labor in the line of work he

was formerly engaged or any other kind of work to w/c he could be assigned. Total to earn wages in the same kind of work, or a work of similar nature, that he was trained for or accustomed to perform, or any kind of work w/c a person of his

disability does not mean a state of absolute helplessness, but disablement of an EE

mentality and attainments could do. The approval of claimants application for optional retirement for disability, although he has not yet reached the age of compulsory retirement age, is an indication of his physical incap to render further efficient service. case at bar, Vicentes PTD is established by several factors & circumstances. Pets app for optional retirement on the basis of his ailments had been approved. Considering that he was only 45 y/o when he retired and still entitled, under good behavior, to 20 more yrs in service, the approval of his optional retirement app proves he was no longer fit to continue his ENT. For optional retirement is allowed efficient service.

Vicente v ECC: The test of w/n an EE suffers from PTD (as defined above). In the

only upon proof that the EE-applicant is already physically incap to render sound and

Conversion from PPD to PTD

GSIS v CA and Balais: EE suddenly experienced chills, followed by loss of

consciousness. She was diagnosed to be suffering from Subarachnoid Hemorrhage Secondary to Ruptured Aneurysm. After undergoing craniotomy, she was finally discharged. Despite her operation, the EE, a cashier of the NHA, could not perform

her duties as efficiently as she did before her illness. This forced her to retire at the age of 62 and filed a claim for disability benefits. from her retirement. GSIS granted her TTD benefits and subsequently, PPD benefits for 9 months starting

She requested GSIS for the conversion of the classification of PPD to PTD, but GSIS denied her request and informed her that her condition did not satisfy the criteria for PTD.

RULING: While it is true that the degree of the EEs physical condition at the time of her retirement was not considered as PTD, yet it cannot be denied that her condition subsequently worsened after her head operation and consequent retirement. A persons disability may not manifest fully at one precise moment in time but rather temporary may later on become permanent or one who suffers partial disability becomes totally and permanently disabled from the same cause. Jurisprudence

over a period of time. It is possible that an injury w/c at first was considered to be

likewise show that disability is intimately related to ones earning capacity. The court occupation w/o serious discomfort or pain and w/o material injury/danger to life. And shown that the EEs ailment qualifies as such.

construed PTD as the lack of ability to follow continuously some substantially gainful there is nothing in the law that prohibits the conversion of PPD to PTD benefit if it is

Is Earning Capacity IMPAIRED if earning is higher after the injury?

Central Azucarera Don Pedro v WC Commissioner: EEs alleged new ENT after receiving compensation for a PPD, has a higher salary. RULING: Even supposing it to be true, that fact would not in itself necessarily affect the laborers claim for compensation for a PPD. An injured laborers incap for work is not to be measured solely by the wages he receives, or his earning after the matters/factors. As noted in the American Law Reports, there are a number of than what he earned before may still have suffered an impairment of earning capacity: thus, it may indicate: his wages; ENT;

injury, since the amt of such wages/earnings may be affected by various extraneous possible explanations of the fact that an EE receives higher wages after an injury

a) That the EE is the beneficiary of a mere gratuity and does not actually earn b) That the EE, by education & training, has fitted himself for more renumerative

c) That the EE works longer hrs than he did before his injury, his hourly d) That a general change in wage scales has taken place for the type of work or e) That the new wages are intended as an inducement to him to refrain from f) That the EE, before his injury, was younger or a minor; duration. pursuing a clam; in the industry; renumeration having increased;

g) That the ENT in w/c the EE was employed after the injury was of uncertain

Should the Previous Compensation for Lesser Disability be Deducted?

Knoxville Knitting Mills v Galyon: The EE who has lost 3 fingers on his left hand, 19 yrs before he entered the service of the ER involved in the case, lost his left hand recover for the loss of the hand, but the ER contended that the value of the 3 fingers previously lost should be deducted. deduction. in an industrial accident while performing his duties as the latters EE. He sought to

US SC RULING: Deduction is prohibited because there is no law allowing for such

Ph SC jurispridence: To offset the undue hardship/injustice that may, at times be ALTERNATIVES have been resorted to: loss; or

caused to the ER, in consequence of the strict/literal interpretation of the law, the ff a) An insurance secured by the ER to protect him/his business from the resulting b) An amendment of the law, to provide for a deduction of the compensation formerly paid (Apportionment Statute).

Ch VII. DEATH BENEFITS Amount of Benefits

The System shall pay to the primary beneficiaries upon the death of the covered EE an up to 5y/o, beginning w/ the youngest, and w/o substitution.

amt equal to his monthly income benefit, PLUS 10% thereof for each dependent child

If the EE has no primary beneficiary, the Sys shall pay to his Secondary beneficiaries
Minimum Death Benefit: at least P15K Duration guaranteed for 5yrs. the monthly income benefit up to 60 months.

Death of a Covered EE who is under PTD 80% of the MIB His dependents: dependents pension, PROVIDED: a) The marriage must have been validly subsisting at the time of the disability; b) If he has no primary beneficiary, the Sys shall pay to his secondary remaining balance of the 5-yr guaranteed period; beneficiaries the monthly pension, excluding the dependents pension, of the

c) The minimum death benefit is at least P15k

Funeral Benefit P3k to be paid upon the death of a covered EE or PTD pensioner Dependents as enumerated by Art 167(i):

1. legitimate, legitimated, legally adopted or acknowledged natural child who is

unmarried, not gainfully employed, and not over 21y/o; OR over 21y/o provided he is incapacitated an incapable of self-support due to a physical/mental defect w/c is congenital or acquired during minority;

2. the legitimate spouse living w/ the EE;

3. the parents of said EE wholly dependent upon him for regular support. Dependency does not mean absolute dependency for the necessities of life, but rather, that the dependent looked up to and relied on the contribution of the decedent in whole or in part, as a means of supporting and maintaining herself in accordance w/ her station in life. (A person ma be dependent, accdg to this view, although able to maintain himself w/o any assistance from the decedent)

Test of Dependency is not merely whether the contributions were necessary to bare the assistance he received, if such contributions were relied on by claimant for his means of living as determined by his position in life.

subsistence; dependency may exist although the dependent could have subsisted w/o

be a dependent. There may be dependency notwithstanding the EE did not work steadily or was absent from the home at the time of his accidental death, and

- One need NOT be actually a part of the decedents household in order to

notwithstanding the EEs unlawful acts or his statement in his app for ENT that he had no dependents.

Rule: Support furnished to the claimant coupled w/ a reliance thereon establishes

dependency. The test of dependency is NOT whether the claimants could support life w/o contributions, but whether they depend on such contributions as part of their income or means of living.

Spouse as Dependent a marriage must exist, even if the spouse is gainfully employed, so long as there is still financial need for support.

Vda de Macabenta v Davao Stevedore Terminal Co: When the decedent met the

vehicular accident, the claimant-widow was not yet married to the decedent although they had already been living together as H&W for the past 3 months. However, on was hospitalized up to his death. the day following the accident, they got married at the hospital where the deceased RULING: It is true that the marriage took place after the fatal accident, but there was no question that at the time of his death, she was married to him. She, therefore, dependent. comes entirely w/in the letter of the law. And the child also falls w/in the meaning of

2 Wives as Claimants ECC is empowered by law to resolve disputes in compensation claims. It should be noted however, that ECC may act as referee and arbitrator bet the 2 claimants and help them reach a mutually acceptable compromise settlement.

2 Muslim Wives they are both entitled to compensation benefits. Under the Muslim law, a Muslim male may have more than 1 wife but not more than 4 at a time. And they are considered primary beneficiaries.

ECCs Suppletory Rules w/ regard to Distribution of the MIB to the qualified 1. MIB shall be shared equally by all primary beneficiaries incl dependent children, wo were not considered in the determination of the dependent pension. Upon emancipation or otherwise disqual to entitlement to the dependent pension of a income benefits shall once again be divided equally by the qualified primary benefits; beneficiaries:

dependent child, only 10% shall be deducted from the benefits and the remaining

2. If there are no primary beneficiaries, their secondary beneficiaries shall also share equally in the MIB.

Separated Spouse may be held entitled to compensation benefits if the separation a. Refusal of the covered EE to continue living w/ the surviving spouse; or the EEs b. Attempt of the covered EE against the life of the surviving spouse, common c. Commission of an act of sexual abuse against the surviving spouse, common d. The covered EEs recurrent commission of physical violence, or grossly abusive conduct, against the surviving spouse, common child/children or child/ren of the spouse; child/children or child/children of the spouse by the covered EE; child/children of spouse; abandonment of the said spouse, w/o just cause; occurred owing to any of the ff circumstances:

e. The covered EEs infliction of physical violence, or imposition of moral duress, to compel the surviving spouse, common child/ren or child/ren of the spouse to change their religious or political affiliation;


Attempt of the covered EE to corrupt, or induce the surviving spouse common child/ren or child/ren of the spouse to engage in prostitution, or to make them connive w/ the EE in such an act of corruption or inducement;

g. Drug addiction or habitual alcoholism of the covered EE; h. Lesbianism or homosexuality of the covered EE; i. j.

Contraction of bigamous M by the covered EE, whether in the PH or abroad; Sexual infidelity or perversion of the covered EE;

k. The covered EEs act of allowing the surviving spouse, common child/ren or l. child/ren of the spouse to be subjected to acts of lasciviousness; and The covered EEs contraction of serious, STD extra-maritally.

Parents as Dependents

If the deceased EE is the adulterous child of the wife, the H cannot claim as support said deceased EE.

dependent of said deceased EE, in the same manner that he is not duty-bound to

Since abandonment of the child by the parent is cause for the ceasing of the situation of said parent, it follows that he cannot claim as a dependent in a compensation case where the deceased EE is an abandoned child.

oblig of the former to support the latter, no matter how financially desperate is the

Death Benefit and Beneficiaries

Death benefit are paid in form of cash monthly pension:

a. For life to the primary beneficiaries, guaranteed for 5yrs; primary beneficiaries;

b. For not more than 60months to the secondary beneficiaries, in case there are no c. In no case shall the total benefit be less than P15k The Beneficiaries are:

1. Primary Beneficiaries

a. Dependent spouse until s/he remarries;

2. Secondary Beneficiaries

b. Dependent children (legitimate, legitimated, natural-born or legally adopted); a. Illegitimate children and legitimate descendants; b. Parents, grandparents, grandchildren

The amt of income benefits shall be equivalent to the MIB under PTD and PPD. if the deceased EE has no beneficiaries at the time of his death.

Under ECC Rules, the death benefit shall accrue to the Employees Compensation Fund

Death Benefit after Retirement

Manuzon v ECC: Generally, the term covered EEs refers to an EE who at the time

of his death is still an EE covered by the GSIS/SSS. On the other hand, the IRR of the ECC states that to be entitled to death benefits, the EE need not be an actual EE of the public/private sector at the time of his death; he can be a retired EE whose retirement was brought about by permanent disability.

FACTS: During his ENT, the deceased suffered from a stroke, caused by a blockage of arteries. He had to retire because of paralysis caused by the stroke when he was an asst professor. He died after compulsory retirement caused by cardiovascular after his retirement caused by work-oriented paralysis arising from the attack. attack or MI. The ECC denied the claims because the death came 4 and a half yrs

Benefits for Death of Pensioner (Art 194(b) death benefit shall be paid to the

beneficiaries if an EE, while receiving PTD benefit dies. The death benefit here is lower than that under par. (a). also, it shld be noted that this provision does not MIB from PPD. apply to cases where a member under PPD dies during the period he is receiving

Is the period of entitlement 5yrs only or even beyond?

Art 194(1): The death benefit is guaranteed for 5 yrs.

ECC Amended Rules: the payment of said benefit shall begin at the month of death and shall continue to be paid for as long as the beneficiaries are entitled thereto. It for as long as they are entitled thereto. death of a covered EE. further states that after the guaranteed 5yrs, the beneficiaries shall be paid the MIB GSIS President Directive: suspended the payment of death benefit beyond 5 yrs from

Ch VIII PROVISIONS COMMON TO INCOME BENEFITS Art 195. All questions of relationship & dependency shall be determined as of the TIME OF DEATH.


An ER who is delinquent in his contributions shall be liable to the Sys for benefits w/c

may have been paid by the Sys to his EEs or their dependents, and any benefit & personal w/c is hereby declared to be preferred to any credit, except taxes. The payment by the ER of the lump sum equivalent of such liability shall absolve him EE concerned.

expenses to w/c such ER is liable shall constitute a lien on all his property, real or

from the payment of the delinquent contribution and penalty thereon w/ respect to the Failure /refusal of the ER to pay/remit the contributions herein prescribed shall NOT

prejudice the R of the EE or his dependents to the benefits under this Title. If the of his EE, the ER shall be liable to the Sys for the lump sum equivalent to the benefits to w/c such EE or his dependents may be entitled.

sickness/injury/disability/death occurs before the Sys receives any report of the name


If any EE under PPD suffers another injury w/c results in a compensable disability

greater than the previous injury, the SIF shall be liable for the income benefit of the new disability, provided that if the new disability is related to the previous disability, the Sys shall be liable only for the difference in income benefits.


NO claim for compensation under this Title is transferable or liable to tax, attachment,

garnishment, levy or seizure by or under any legal process whatsoever, either before

or after receipt by the person/s entitled thereto, except to pay any debt of the EE to the Sys. (in pursuant to Police Power of the State) Art 199. EARNED BENEFITS

Income Benefits shall, w/ respect to any period of disability, be payable to an EE who is entitled to receive wages, salaries, or allowance for holidays, vacation or sick leaves, and any award of benefit under a CBA or other agreemt. Art 200. SAFETY DEVICES

In case the EEs injury/death was due to the failure of the ER to comply w/ any law, or to install and maintain safety devices, or take other precautions for the prevention of injury, said ER shall pay to the SIF a penalty of 25% of the lump sum equivalent of been paying a rate of contribution higher than required of them, are enjoined to

the income benefit payable by the Sys to the EE. All ERs, esp those who shld have undertake & strengthen measures for the occupational health & safety of their EEs. Art 201. PRESCRIPTIVE PERIOD

No claim for compensation shall be given due course unless said claim is filed w/ the BUT accdg to Manila Railroad Co. v Perez: Despite the 3-yr prescriptive pd expressly System w/in 3yrs from the time the cause of action accrued.

provided by Art 201, a compensation claim may be filed beyond this but before the

lapse of the 10th yr from accrual of the cause of action, applying Art 1144 of the CC.
ECC v Sanico: 3yrs have to be counted from the time the EE lost his earning capacity, NOT from the time the illness was discovered. FACTS: EE was a former EE of John Gotamco & Sons as a wood filer until he was

separated from ENT due to his sickness. He was suffering from PTB. He filed w/ the SSS a claim for compensation benefits but was denied on the ground of prescription. Constructive Filing

Although the Code requires the claim to be in writing, the ff acts have been held as 1. A verbal request for medical & hospitalization expenses made to the corporate ER 2. Request for financial aid in behalf of the family of the deceased worker made by Under ECC Resolution 2127 a claim is deemed to have been filed for the purposes of prescription: the president of his union. through its treasurer; equivalent to filing a claim w/ the ER as required by the WC:

3. When the system itself receives from the concerned EE, or his duly authorized rep/s or his ER, a written notice giving info on the occurrence of a certain contingency, w/c may be held compensable;

4. When a pertinent and authentic document evidencing a particular contingency that payment of whatever benefits that may duly accrue to the EE;

befalls an EE is submitted to and received by the Sys, for the purpose of initiating

5. When the concerned EE, or any of his legal beneficiaries or duly authorized rep/s files a FORMAL CLAIM, w/ the Sys for life, retirement and/or other insurance benefits because of disability or death, w/c may also be held compensable.

Provided however, that in all these 3 cases, the claimant shall be required, if

necessary, to submit addtl supporting docs/papers to establish compensability, otherwise, noncompliance therewith for an unreasonably long time shall be laches. deemed as abandonment of claims and any subseq claims shall be barred by

Mailing Date of Claim Considered Date of Filing

Suanes v WCC: EE died. Claim for compensation was filed 2 yrs later. But the claim designated the wrong ER, who was impleaded about 12yrs later. RULING: Ordinarily, R to claim prescribes 10yrs from the accrual of the claim (from death of EE), but where the orig claim designated the wrong ER, the defense of prescription must be rejected in the interest of substantial justice.
Period to File Claim of Minors and the Mentally Deficient

Minors - prescribes in 10yrs from the time they reach the age of majority. appointed

Mentally deficient prescribes in 10yrs from the moment a legal guardian has been Art 225 of the FC: The mother/mother of the mentally incapacitated child/ren, or of the

dependent minor child/ren and w/o the necessity of securing judicial appointment as legal guardian, can file a claim for compensation under the WCA and un under the present law on EC for himself or herself and in behalf of those nons sui juris.

Erroneous Payment

If the Sys, in GF pays income benefit to a dependent who is inferior in R to another

dependent or w/ whom another dependent is entitled to share, such payment shall

discharge the Sys from liability, unless and until such other dependent notifies the In case of doubt as to the respective Rs of rival claimants, the Sys is hereby Sys of his claim prior to the payments.

empowered to determine as to whom payments shld be made in accdance w/ such regulations as ECC may approve. If the money is payable to a minor/incompetent, payment shall be made by the Sys to such person/s as it may consider to be best qualified to take care & dispose of the minor/incompetents property for his benefit.


No atty shall demand or charge for his services any fee claimant may enjoy/use it to the fullest

The intent of the law is to free the award from any liability/charge so that the it is the claimant who is exempt from liability for attys fees. The defaulting govt services of counsel by unjustly refusing to recognize the validity of the claim.

agency remains liable for attys fees bcoz it compelled the claimant to employ the

Parties it is not fatal to a claim for compensation that the System was not impleaded as party respondent.


All laws to the contrary notwithstanding, the SIF and all its assets shall be exempt from any tax, fee, charge, levy, or customs or import duty and no law hereafter enacted shall apply to the SIF unless it is provided therein that the same is applicable by expressly stating its name.


a) All ERs shall keep a logbook to record chronologically the sickness, injury or

death of their EEs, setting forth therein their names, dates, and places of the

contingency, nature of the contingency and absences. Entries in the logbook shall

be made w/in 5 days from notice/knowledge of the occurrence of the contingency.

W/in 5 days after entry in the logbook, ER shall report to the Sys only those b) All entries in the logbook shall be made by the ER or any of his authorized contingencies he deems to be work-connected.

officials after verification of the contingencies or the EEs absences for a period of a day or more. Upon the request of the Sys, the ER shall furnish the necessary cert regarding info about any contingency appearing in the logbook, citing the the duly authorized rep of the Sys.

entry #, page # and date. Such logbook shall be made available for inspection to c) Should any ER fail to record in the logbook an actual sickness, injury or death of any of its EEs w/in the period prescribed herein, give false info or withhold material info already in his possession, he shall be held liable for 50% of the entitled, the payment of w/c shall accrue to the SIF.

lump sum equivalent of the income benefit to w/c the EE may be found to be d) In case of payment of benefits for any claim w/c is later determined to be fraudulent and the ER is found to be a party to the fraud, such ER shall reimburse the Sys the full amt of the compensation paid. Art 206. NOTICE TO ER

The EE, his dependents, or anybody on his behalf, shld give the notice of sickness, purpose is not only to establish the EEs R to compensation, as no claim for

injury or death to the ER w/in 5days from the occurrence of the contingency. The compensation shall be given to the ER, but also to enable the ER to comply w/ its duty under the Rules entering the contingency in the logbook and of giving also due notice to the Sys if the injury/sickness/death is deemed work-connected.

When Notice to ER NOT Needed (Under ECC Resolution 2127):

1. When the EE suffers the contingency w/in the ERs premises; contingency from w/c he suffers;

2. When the EE officially files an app for leave of absence by reason of the 3. When the ER provides medical services and/or medical supplies to the EE; 4. When the ER can be reasonably presumed to have knowledge of the EEs contingency, in view of the ff circs: occurred;

a. The EE was performing an official function for the ER when the contingency b. The EEs contingency has been publicized thru mass media;

c. The specific circs of the occurrence of the contingency have been such that the EER can be reasonably presumed to have readily known it soon thereafter; and

d. Any other circs that may give rise to a reasonable presumption that the ER has been aware of the contingency.

Delay/failure to give the ER notice of compensable illness/injury w/in the prescribed or rep in fact knows of such injury/illness or that of such delay or lack of notice.

period does not bar a claim for compensation IF it is shown that the latter, his agent he suffered no damage by reason

Representatives or agents whose knowledge is deemed knowledge of their ER 1. Project engineer in charge of the work 3. Foreman include:

2. Captain of the vessel in w/c the EE worked 4. Asst mgr

5. Superintendent of transport oper. Damage/prejudice that the ER/Sys by reason of the failure to receive the required notice, has been made less able to resist the claim

Effect of Quitclaim does not release the ER; it does not result in waiver; the law the worker is entitled to recover

does not consider as valid any agreement to receive less compensation than what

Even a compromise agreement approved by the court may be disregarded by the NLRC in order to give protection to labor.

Evidence strict observance of the technical rules of evidence is not properly demanded in WC cases (for purposes of establishing relshp bet dependent & decedent)

Physicians Report the findings of the doctors & Chief of the Medical Officer of the GSIS & ECC are not binding on the SC as they are not considered experts.

Foreign Currency

Compensation benefits MAY be paid in foreign currency in its equivalent in Ph currency, esp if based on the ENT contract.

Applicable Law in WC cases, the governing law is determined by the date on w/c the claimant contracted his illness. If the app for compensation does not state when the that he contracted the disease after the effectivity of said PD. claimant contracted the disease, the claim is filed under PD 626, the presumption is



RA 7875 the National Health Insurance Act initiated the Natl Health Insurance Program intending to provide health insurance coverage and health care services for all Filipinos.

Ph Health Insurance Corp is also created to carry out the program


ART 210. Every ER shall render assistance in the establishment & operation of adult approved by DOLE and DEPED.

education programs for their workers and EEs as prescribed by regulations jointly



Art 278. The provisions of this Title shall apply to all establishments or undertakings, whether for profit or not.

Art 279. SECURITY OF TENURE In cases of regular ENT, the ER shall not terminate the services of an EE except for a JUST CAUSE, or when AUTHORIZED by this Title.

1. REINSTATEMENT w/o loss of seniority Rs and other privileges; and 2. To his BACKWAGES inclusive of allowances, and 3. To his OTHER BENEFITS, or their monetary equivalent his actual reinstatement.

An EE who is UNJUSTLY DISMISSED from work shall be entitled to:

computed from the time his compensation was withheld form him up to the time of

Constitution: Art XIII Sec 3:


Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.

Security of Tenure the R not to be removed from ones job w/o valid cause and valid Scope: Consti: all workers procedure

Art 279 LC: only regular EEs

There are 2 types of Security of tenure

1. Security of tenure for a limited period

2. Security of tenure for an unlimited period


GR: ERs are allowed a wider latitude of discretion terminating the ENT of managerial personnel, or those who, while not of similar rank, perform functions w/c by their nature require the ERs full trust & confidence.

as distinguished from Rank-and-file EEs, whose termination on the basis of same grounds require a HIGHER proof of involvement in events in question.

while a managerial EE may be dismissed merely on the ground of loss of confidence, the matter of determining whether the cause for dismissing an EE is justified on ground of loss of confidence, cannot be left entirely to the ER. Even Managerial EEs are Entitled to Security of Tenure

Termination of Managerial EE must be exercised w/o abuse of discretion. & confidence)

Dean of a college a position at the managerial level (occupying positions of trust In-house legal counsel may be a regular EE (entitled to security of tenure because the relationship is one of EE-ER and not atty-client) Hydro Resources Contractors v Pagalilauan: A lawyer may very well be

an EE of a private corp or even of the govt. it is not unusual for a big salaries, rank them in its table of org, and otherwise treat them like its other officers & ees. At the same time, it may also contract w/ a law

corp to hire a staff of lawyers as its in-house counsel, pay them regular

firm to act as its outside counsel on a retainer basis. The same can be said as to doctors, nurses, dentists, PR practitioners, etc

A stipulation in the ENT contract that the EE had voluntarily signed cannot justify the EEs dismissal if it is against law, morals, pub policy, etc. Cabansag Case: after 3 months of probation, he will be a regular EE.


Art 280. REGULAR & CASUAL ENT The provisions of written agreement to the

contrary notwithstanding and regardless of the oral agreement of the parties.

An ENT shall be deemed to be REGULAR where the EE has been engaged to business or trade of the ER,


except where the ENT has been FIXED for a specific project or undertaking the completion or termination of w/c has been DETERMINED at the time of in nature and the ENT is for the duration of the season. engagement of the Ee, or where the work services to be performed is SEASONAL

An ENT shall be deemed to be CASUAL if the nature of his work is NOT NECESSARY to the usual business of the ER, provided, that any EE who has rendered at least 1 YEAR of service, whether to the activity in w/c he is employed and his ENT shall continue while such activity exists.

such service is continuous/broken, shall be considered a REGULAR EE w/ respect

REGULAR/CASUAL presupposes an existence of an ENT Relationship Singer Sewing Machine Co. v Drilon: The nature of the relshp bet a company and its

collecting agents DEPENDS on the CIRCUMSTANCES of each particular relshp.


The collection agents are NOT required to observe office hrs or report to of remitting their collections

Singers office every day, except naturally and necessarily, for thepurpose

They do not have to devote their time exclusively for Singer. They are not prohibited to work elsewhere, nor are they required to acct for their time and submit a record of their activity

The MANNER & method of effecting collections are left solely to the Singer;

discretion of the collection agents w/o any interference on the part of

o o o

The collection agents shoulder their own transpo expenses; collection. No collection, no commission.

They are paid strictly on commission basis, based on the amts of their The commissions earned by them are directly deducted by them from the amt of the collections they are able to effect. Only the net amount is remitted to Singer.

Even though as the respondents contend that their activities are desirable and

necessary for the business of the ER, it is not determinative in this case. No relshp is in dispute or non-existent.

matter how necessary they are, it does not apply where the existence of ENT


Primary standard to determine a regular ENT is the reasonable connection bet the ER. (NATURE of the job) business of the ER.

particular activity performed by the EE in relation to the usual business/trade of the

Test: Whether the former is USUALLY NECESSARY or DESIRABLE in the usual


1. Regular EEs by nature of work; and 2. Regular EEs by years of service.


De Leon v NLRC: Moises was employed by La Tondena as maintenance in its

Engineering Dept.
o o o

His work consisted mainly of painting the company building and equipment & other jobs relating to maintenance. After more than a year of service, He was paid on a daily basis thru petty cash vouchers

response was to dismiss him, claiming that he was contracted on a casual basis only. RULING: The painting & maintenance work given to Moises manifests a treatment consistent w/ a maintenance man and not just a painter. It is of no moment that

He requested that he be included in the payroll of regular workers. La Tondenas

Moises was told when he was hired that his ENT would only be casual, that he was

paid thru cash vouchers, and that he did not comply w/ regular ENT procedure. What determines is the NATURE of his work in rel to the particular business of the ER, or the LENGTH of time of its performance and its continued existence.
Workers Supplied by LOC Considered Regular EEs of Contractee

Ecal V NLRC: The company, Hi-Line Timber denies the existence of an ER-EE relshp

w/ the petitioners, claiming they are ERs of an independent contractor, Mr. Ecal, a former EE of the company, who resigned to be a contractor.

RULING: The court found Mr. Ecal to be a LOC. He was only a poor laborer at the time of resignation and when he became a supplier of laborers for Hi-Line. The of Hi-Line, they are deemed regular EEs of the latter. Contractual Project EE Becoming Regular petitioners perform tasks w/c are usually necessary or desirable in the usual business

Magante v NLRC: Magante was employed by Constress PH as a carpenter. His work involved making of molds. He was never assigned to work outside the plant of the company. Every 3 months, he was made to fill up and sign and ENT contract

relating to a particular phase of work in a specific project. Later, he was told that he could not work anymore because he was already old, that his contract had already expired and was not renewed. RULING: Since the very inception of the petitioners ENT, he was never deployed carpentry work. This proves that (1) he was assigned to perform tasks w/c are

from project to project of the company but had been regularly assigned to perform USUALLY NECESSARY or desirable in the usual business or trade of the company, and (2) that said assignments did not end on a project basis, although the contrary Day-to-Day Contractual EE Becoming Regular was made to appear. He is a REGULAR EE.

Baguio Country Club Corp v NLRC: J. Calamba was employed on a day-to-day basis in various capacities as laborer & dishwasher for 10 months. He was also hired as a gardener for some time and rehired as such, when he was dismissed. He filed for for a specific period as evidenced by the contracts of ENT.

illegal dismissal. The ER maintained he was a contractual EE whose ENT was fixed RULING: the corp, while in the business of entertainment, the records reveal that the EE was repeatedly re-hired to perform tasks. Such repeated re-hiring and continuing need for his service are sufficient evidence of the necessity of his service to the than 1 yr. He is a regular EE companys business. Moreover, he also performed these tasks w/c lasted for more

The same is true for sales route helpers that a softdrinks co hired for 5 months and thereafter on a day-to-day basis. They would wait every morning outside the company premises, so that when regular sales route helpers were absent or addtl helpers were needed, they woud be hired and paid on a daily wage. They would go w/ route salesmen on board the delivery trucks and undertook the task of loading & unloading soft drink products to various delivery points.

Temporary EE Becoming Regular

Beta Electric Corp v NLRC: Pet argues that the workers appointment was temporary RULING: that she had been hired merely on a temporary basis, for purposes of meeting the seasonal or peak demands of the business so that her ENT may lawfully be terminated after the accomplishment of her task is untenable. An ENT may only be and hence, she may be terminated at will

said to be TEMPORARY where it has been fixed for a specific undertaking. one w/c are USUALLY NECESSARY or desirable in the usual business. Casual EE: Regular EE by YEARS OF SERVICE

Respondents work as a typist-clerk is far from being specific or seasonal, but rather,

another type of EE is the casual EE who, after 1 yr of service, becomes regular. be on-and-off, but every time the particular work activity occurs, he is the one to be rehired. In this sense he is a REGULAR CASUAL.

BUT he is regular only for that work activity for w/c he was hired. His ENT may

Ph Geothermal Inc. v NLRC: Petitioner, a US corp, is the prime contractor of

NAPOCOR in Albay. Private Respondents are EEs of PGI occupying various

positions ranging from carpenter to Clerk II who had worked in the company under months. These contracts were regularly renewed to the extent of 3-5 yrs until the

indiv contracts, categorized as contractual ENT for a period ranging from 15days to 3 petitioner started terminating their ENT by not renewing their indiv contracts, when w/ an alleged contractor who supplied it w/ skilled manpower.

they organized a union. Subsequently, petitioner entered into job contracting agreemt RULING: Assuming that an EE is regarded as casual, he becomes entitled to be regarded as a regular EE as soon as he completes 1 yr of service.

Casual EE w/ less than 1 yr of service does not become regular

Capule v NLRC: Petitioners were hired to cut cogon grass & weeds at the back of the schedule and they worked on any day of the week on their own discretion and convenience.

factory building of the respondent company. They were not required to work on fixed

RULING: The usual business/trade of the company is manufacture of cultured milk. The cutting of cogon grass in the premises of the factory is hardly necessary or desirable in the usual business of the company. They may only be regarded as is not the case here.

regular if they have already rendered at least 1 yr of service in the company, which

Salary of Casual EE Converted to Regular should not be reduced

Ph American Mgt Assoc v CIR: Upon the increase of the min wage, the parties agreed to multiply the daily rate of the workers by 30. There were, however, casual EEs

receiving more than the statutory min wage at the time who were converted to

regular EEs but paid monthly salaries determined under a different formula. In their case, their actual rate was reduced to the min rate and then also multiplied by 30 calendar days.

RULING: These EEs have been converted to regular and so should be entitled to be also be allowed to retain the same rate they were enjoying at the time of their conversion to regular EEs.

treated as such in every respect. In addition to enjoying the fringe benefits, they shld

May regular jobs be contracted out?

DO 18-02: Contracting out a job, work or service when NOT done in GF and not justified by the exigencies of the business and the same results in the termination of regular EEs and reduction of work hrs or reduction or splitting of the bargaining unit is PROHIBITED.

Serrano v Isetann: the mgt abolished some regular positions and instead hired an

independent contractor.

RULING: In contracting the services of Gemac Machineries, as part of the companys cost saving program, the services rendered by the mechanics became redundant & superfluous, and therefore properly terminable. The company merely exercised its

business judgment or mgt prerogative. And in the absence of proof that it abused its discretion or acted in malicious and arbitrary manner, the court will not interfere. But contracting is subj to conditions, namely: 1. The contractor must be legit and not a LOC; DO 18-02, nor does it amount to ULP.

2. The contracting out is not one of the arrangements prohibited under Sec 6 of

Contracting Out Almost All Regular Jobs

Wack Wack Golf & Country Club v NLRC: Because a large portion of the pets

premises was destroyed by fire, the club has to suspend the operation of its Food & Beverage dept, about w/c it notified the DOLE & the affected EEs. But the EEs, proceedings, the management and union entered an agreement w/c included a alleging the suspension as discriminatory, filed a notice of strike. In the conciliation separation benefit and retirement package, to w/c EEs signed a Release & Quitclaim. Later on, the club entered into a mgt contract w/ Business Staffing & Mgt Inc, under w/c the latter would provide almost all the services for the club.

RULING: The EEs signed the conciliation agreement at their own will. There is no

showing of deceit or coercion on the part of the club. Further, the respondents were dismissal.

paid hefty amounts of separation pay. Their waiver was voluntary. There is no illegal

Does Contracting Out Require Unions Conformity?

San Miguel EEs Union v Bersamira: Contracting out of work is a proprietary R of the

ER in the exercise of an inherent mgt prerogative. The mgt should not be hampered in the operations of its business.

PROJECT EMPLOYMENT Project EE one whose ENT has been fixed for a specific project or undertaking, the

completion or termination of w/c has been determined at the time of engagement of ENT is for the duration of the season.

the EE or where the work or service to be performed is seasonal in nature and the Project would ordinarily have some relationship to the usual business of the ER. 2 Types of Project Activities

1. A project could refer to a particular job or undertaking that is WITHIN the regular or usual business of the ER company, but w/c is DISTINCT & SEPARATE, and IDENTIFIABLE as such, from other undertakings of the company. o Begins & ends at determined or determinable times

2. A project could also refer to a particular job or undertaking that is NOT within the regular business of the corp. Such a job or undertaking must also be Begins and ends at a determined or determinable time IDENTIFIABLY SEPARATE from the ordinary or regular business of the ER. The services of project EEs are coterminous w/ the project and may be terminated upon the end or completion of the project for w/c they were hired.

A particular construction job/project of a construction company

Principal Test for determining whether particular EEs are PROJECT or REGULAR EEs is whether or not the project ees were assigned to carry out a specific project or engaged for that project. undertaking the duration (and scope) of w/c were specified at the time the EEs were

Period a length of existence; duration; a point of time marking a termination as of a cause or an activity; an end, a limit; a bound; conclusion; termination.

Violeta Case: the court observes that the EE is clearly hired for a specific project. But

the absence of definite duration of the project led the court to conclude that the EE was regular. To be exempted from the presumption of regularity of ENT , the

agreement bet a project EE and his ER must strictly conform w/ the requirements & conditions provided in Art 280. It is not enough that an EE was hired for a specific project or phase of work. There must also be a determination of or a clear engaged. agreement on the completion or termination of the project at the time the EE is
The length of service of a project EE is NOT the controlling test of ENT tenure the completion or termination of w/c has been determined at the time of the engagement of the EE.

but whether or not the ENT has been fixed for a specific project or undertaking

Project EEs in the Construction Industry

Fernandez v NLRC & DM Consunji: DMC presented documents showing that petitioner was hired as a project EE w/ the specific dates of hiring, the duration of hiring, the the Ministry of Labor. Such data covered the period from Nov 1974 to March 1986. The document clearly showed gaps bet the hiring of petitioner in the numerous projects. dates of his lay-offs, incl the lay-off reports and the termination reports submitted to

projects (not continuously worked but only intermittently) as he was hired for specific

Policy Instruction #2o: There are 2 types of EEs in the construction industry:

(1) Project EEs - those employed in connection w/ a particular construction proj

(NOT entitled to termination pay if their services are terminated as a result of the of the number of projects in w/c they have been employed). ; and particular project .

completion of the project or any phase thereof in w/c they are employed, regardless (2) N0n-project EEs those employed by a construction company w/o reference to a
PI 20 requires an ER to report to the nearest Public ENT Ofc the fact of

termination of a proj EE as a result of the completion of the project/phase. an indication that a worker is a proj. EE)

(Superseded by DO 19 w/c does not require the reporting, but merely considers it

Indicators of Project ENT

1. The DURATION of the specific/identified undertaking for w/c the worker is engaged 2. Such duration, as well as the specific work/service to be performed, is defined in 3. The work/service performed by the EE is in CONNECTION w/ the particular 4. The EE, while not employed and awaiting engagement is FREE to offer his 5. The TERMINATION of his ENT in the particular project/undertaking is REPORTED using he prescribed form on EEs terminations/dismissals/suspensions. the proj EE. services to another ER; project or undertaking for w/c he is engaged; an ENT AGREEMENT and is made clear to the EE at the time of hiring; is reasonably DETERMINABLE;

to the DOLE Reg Ofc w/in 30 days following the date of his separation from work,

6. An undertaking in the ENT contract by the ER to pay COMPLETION BONUS to

Members of a work pool from w/c a construction co draws its proj EEs, if considered indefinite period. If they are employed in a particular project, the completion of the BUT in Raycor Aircontrol Systems Inc v NLRC: Project EEs may or may not be project or any phase thereof will not mean severance of ER-EE relshp.

Work Pool

EE of the construction co while in the work pool, are NON-project EEs or EEs for an

members of a work pool (that is, the ER may or may not have formed a work pool at all), and in turn, members of a work pool could be either proj. EEs or regular EEs. In the instant case, NLRC id not indicate how private respondent came to be considered

members of a work pool as distinguished form ordinary (non-work pool) EEs. It did not

establish that a work pool existed in the first place. Neither did it make any finding as to whether the herein private respondents were indeed free to leave anytime and offer their in defining the precise nature of his ENT. services to other ERs, despite the fact that such a determination would have been critical

An EE in the work pool is NOT necessarily a regular EE; he may also be a project EE.

Project EE:

Cartagenas v Romago Electric Co: Romago depends for its business on the contracts it is able to obtain from real estate developers and builders of buildings. Its work depends on the availability of such contracts or projects. RULING: Since its work depends on availability of such contracts or projects, necessarily the duration of the ENT of its workforce is not permanent but coterminous w/ the projects to w/c they are assigned and from whose payrolls they the availability of projects if it would have to carry them as regular EEs and pay them wages even if there are no projects for them to work on.

are paid. It would be extremely burdensome for the ER who, like them, depends on

Exception to the Rule that Proj EEs are Not Entitled to Separation Pay

Salazar v NLRC: GR: Project EEs are not entitled to termination pay if their ENT are terminated as a result of the completion of the project or any phase thereof in w/c they have been employed by a particular construction co.

De Ocampo v NLRC: The GR is n/a in the case at bar, because although the contracts of the project workers had indeed expired, the project itself was still on-going and so continued to require the workers services for its completion. There is no showing that their services were unsatisfactory to justify their termination. The real reason for in the strike against the ER.

the termination, was the complaint the project workers had filed and their participation

3 Types of Non-Project EEs

De Jesus v PNCC: Petitioner was a carpenter for the PNCC. While on duty, he

vomited blood and was treated at the company clinic. But when he reported back, he was no longer accepted, upon PNCCs contention that he was employed only for the specific period and specific works stated in his appointment and that as a project worker his separation was due to the completion of the project.

RULING: It is clear from the records that petitioner is a non-project EE and entitled to regular ENT having rendered service for more than 10 yrs. As a carpenter, he performed NECESSARY work for the respondent corp. He is a member of a work

pool of workers, w/c Policy Instruction #20 terms as nonproject ees or at the very

least a probationary worker, who, after a pd of 6mos has achieved a regular status.
3 Types of Non-Project EEs 1. Probationary EEs 2. Regular EEs 3. Casual EEs.

What makes a Project EE Regular

Samson v NLRC: Petitioners assigned tasks were usually necessary/desirable in the usual business of the ER. The repeated re-hiring and continuing need for his services are sufficient evidence of the necessity and indispensability of such services. From the circs, it is apparent that (for 28 yrs of service) periods have been imposed to preclude the acquisition of tenurial security by the EE should be struck down as contrary to public policy.

Tomas Lao v NLRC: workers initially hired for specific projects but repeatedly re-hired

for 7 years. They have become regular EEs. Their ENT became non-coterminous w/ petitioners business and were re-engaged for many more projects w/o interruption.

specific projects when they started to be continuously re-hired due to the demands of

Circumstances that Make a Proj EE Regular: the ff concur:

A project EE or a member of a work pool may acquire the status of a regular EE when 1. There is a CONTINUOUS REHIRING of proj EEs even AFTER CESSATION of a 2. The tasks performed by the alleged project EE are VITAL, NECESSARY & project; and

However, the length of time during w/c the EE was continuously re-hired is NOT controlling, but merely serves as a badge of regular ENT.

INDISPENSABLE to the usual business or trade of the ER.

Completion of Project Not valid reason to Separate a Project EE who has Become Regular when a proj ee who has gained regular status is separated from ENT on the alleged ground of completion of proj, such separation is for an invalid reason.

Computing Backwages of Proj EE who has become Regular: No work, no pay Rule - Following the principles of suspension of work and no pay BETWEEN PROJECTS in computing their backwages, the amounts corresponding to what could have been when the ER was not undertaking projects. earned during the periods from the date they were dismissed until their reinstatement applicable

SEASONAL ENT: REGULAR SEASONAL AFTER ONE SEASON Regular Seasonal EEs are those called to work from time to time. The nature of their relshp w/ the ER is such that during off season they are temporarily laid off but during summer season they are reemployed, or when their services may be needed. They are not, strictly speaking separated from the service but are merely considered as on leave of absence w/o pay until they are reemployed. Their ENT relshp is never severed but only suspended. As such those EEs can be considered as REGULAR EES of the ER.

For them to be excluded from the ambit of regular EEs, it is not enough that they perform work/services that are seasonal in nature. They must also have been employed ONLY for the duration of ONE SEASON. (2 conditions must concur). ER-EE Relshp exists bet Milling Co and its workers even during off season -

the cessation of the companys milling activities at the end of the season is

certainly not permanent. It is a foreseeable suspension of work, both the company and laborers have reason to expect that such activities will be resumed. There is therefore merely a temporary cessation of the manufacturing process due to of other justified reasons, to sever the ENT relshp of bet the parties. Seasonal Pakyaw EEs

passing shortage f raw material that by itself alone is not sufficient, in the absence

Zamudio v NLRC: The nature of their ENT as pakyaw basis, does NOT make

petitioners independent contractors. They are considered EEs as long as the ER

exercises control over the means by w/c such workers are to perform their work. The seasonal nature of the petitioners work does not detract from the conclusion that ER-EE relshp exists. Seasonal workers whose work is not merely for the duration of the season, but who are rehired every working season are considered regular EEs.

Mercado v NLRC: Petitioners were agricultural workers in Private respondents rice land year, it was clear that they were not in the regular employ of the private respondent. They performed different phases of agri work in a given year. However, during that period, they were free to work for other farm owners.

and sugar land. Their indiv ENTs exceeds 1yr. Although they were hired from year to

RULING: The one-year duration on the job is pertinent to deciding whether a casual EE has become regular or not. But it is not pertinent to a seasonal or project EE. In other words, passage of time does NOT make SEASONAL worker regular or permanent.

Regular Contractuals Entitled to benefits of Regular EEs

Cinderela Marketing Corp v NLRC: Private respondents were employed by petitioner as regular contractuals performing work as salesladies, wrappers, stockmen, pressers

as required by the regular business of petitioner. They are seasonal EEs who are hired during peak season of the year. As soon as the demand for their services such EEs be allowed to stay, w/c resulted in the retention of seasonal ees as regularized. But they were excluded from the bargaining unit.

ends, their ENT is terminated. During CBA negotiations, the union proposed that the
regular contractuals who would enjoy the benefits of regular EEs, and may possibly

RULING: Cinderela has engaged in a semantic interplay of words distorting the service to the petitioner in activities necessary/desirable in the usual business. Therefore, they are regular EEs under the CBA. FIXED-PERIOD ENT, WHEN VALID

definition of a regular EE. The private respondents have rendered at least 1 yr of

Brent School v Zamora: Alegre was engaged as athletic director by Brent for a specific

term of 5 yrs. Subsequent subsidiary agreemts reiterated the same terms &

conditions, including expiry date as those contained in the orig contract. It was

legitimate before the LC was passed. Some 3 months before the expiration of the Dept advising of the termination of his services on the ground of completion of

stipulated period, Alegre was given a copy of the report filed by Brent w/ the Labor contract, and expiration of the definite period of ENT. He signed a receipt indicating
full payment of services. But the Reg Director refused to give clearance to Brent

and instead ordered Alegres reinstatement as permanent EE.

RULING: Alegres contract of ENT was lawfully terminated and he was not entitled to reinstatement. The fixed term of ENT was agreed upon knowingly and voluntarily by the parties.

Brent Doctrine: Art 280 of the LC does not prohibit an ENT contract w/ a fixed period, pressure being brought to bear upon the EE and absent any other circumstance vitiating consent.

provided the same is entered into by the parties w/o any force, duress, or improper

Pre-termination of Fixed-Period ENT, Liability of ER

A fixed-period EE is NOT a regular EE because his job, as anticipated and agreed, will exist only for a specified period of time (It is not permanent). BUT he is deemed regular in 2 senses: the ER; and

1. The nature of his work is necessary or desirable in the principal business of 2. He enjoys security of tenure during the limited time of his ENT.

Before the end of the agreed period, he CANNOT be removed w/o a valid cause. If this is done, the ER commits illegal dismissal and breach of contract, w/c entitles the EE to payment of his salaries corresponding to the unexpired portion of his contract.

Illegal Fixed-Period ENT

Cielo v NLRC: Cielo was a truck driver employed for a fixed period of 6 months. But his services were terminated a few days from the expiration of the contract. It appears from the records that all the drivers of the company have been hired on a fixed contract basis. The company merely filled in the blanks w/ the corresponding of the doc. They were paid through indiv vouchers rather than a common payroll. data, such as the drivers name & address, the amt received by him, and the date

RULING: the ERs intention is obviously to evade the app of the labor laws by

making it appear that the drivers were not its regular EEs, and may be terminated w/o just cause. In fact, the company did not have to wait for the expiration of the contract as it was there provided that it could be earlier terminated at the option of are null and void.

either party. This prevented the drivers from becoming regular EEs. The agreements

Effect of Retention of EE Beyond the Period of ENT

GR: When, upon the expiration of a contact of ENT for a definite term, the EE continues to render the same services as he rendered during the term of the contract w/o explicitly entering into a new any new agreement, it will be presumed primia facie

that he is serving under a new contract having the same terms & conditions as the original one, w/ respect to the duration of the continued ENT and the renumeration contract or showing that parties understood not to apply the terms of the old contract). for the services rendered. (Rebuttable by evidence showing a change of terms of the

Viernes v NLRC & BENECO: Beneco contracted the services of the 15 complainants as meter readers for 24 days. Their ENT contracts read that they are appointed as meter reader (apprentice). The said term notwithstanding, the complainants were notices of termination, stating that the termination has nothing to do w/ their performance, but rather due to retrenching of personnel due to overstaffing.

allowed to work beyond the term, for more than 2 more months, until they received

RULING: Records show that petitioners have never been probationary EEs. It was

not shown that they were informed at the time of ENT of the reasonable standards under w/c they could qualify as regular EEs. Instead, they were initially engaged to perform their job for a limited duration. While it is true that they were initially

employed on a fixed term basis, they were allowed to continue working in the same capacity w/o the benefit of anew contract. After the expiration of the period, their EEs, because they perform activities w/c are necessary or desirable in the usual business or trade of the ER, w/c comes w/in the definition of a regular EE. When 5-month Contractuals are considered Regular EEs ENT is no longer on a fixed term basis, and they have attained the status of regular

Purefoods Corp v NLRC (PRECEDENT): While the ruling in the Brent Case states, that: the decisive determinant in term ENT should NOT be the activities that the EE is called upon to perform but the day certain agreed upon by the parties for the

commencement & termination of their ENT relshp. BUT the court went on to say that where from the circumstances it is apparent that the periods have been imposed to contrary to public policy. preclude the acquisition of tenurial security by the EE, they shld be struck down as

Brent also laid down the criteria under w/ term ENT cannot be said to be in circumvention of the law on security of tenure: 1. The fixed pd of ENT was knowingly and voluntarily agreed upon by the upon the EE and absent any other circs vitiating his consent; or

parties w/o any force, duress, or improper pressure being brought to bear

2. It satisfactorily appears that the ER and the EE dealt w/ each other on or the latter.

more or less equal terms w/ no moral dominance exercised by the former

None of these criteria had been met in the present case.

The casual workers of petitioner could not be supposed to have

KNOWINGLY & VOLUNTARILY agreed to the 5-month ENT contract. they agree to any terms of ENT contract just to get employed.

Cannery workers are never on equal terms w/ their ERs. Almost always,
The petitioner does not deny that the main bulk of its workforce consisted

of its so-called casual EEs; that casual EEs made up most of its workforce; they hired casual every month for the duration of 5 months, after w/c their services were terminated and they were replaced by other casual EEs on the same 5-month duration; and that these casual EEs were actually doing work that were necessary and desirable in their usual business.

RULING: Purefoods scheme is a clear circumvention of the EEs R to security of tenure and other benefits, and is against public policy and morals.

Effect of Renewals of Fixed-pd ENT in Regular Jobs EEs will attain regular ENT status. But if their contract is not renewed, they are NOT considered regular EEs even if their work was necessary or desirable to the ERs business,

Seafarers are Contractuals

Millares & Lagda v NLRC: They cannot be considered as regular EEs under Art 280. Their ENT is governed by the contracts they sign everytime they are rehired and their ENT is terminated when the contract expires. Their ENT is contractually fixed

for a certain pd of time. They fall under the EXCEPTIOn of Art 280 whose ENT has

been fixed for a specific proj or undertaking the completion or termination of w/c has to be performed is seasonal in nature and the ENT is for the duration of the season.

been determined at the time of engagement of the EE or where the work or services


Probationary ENT shall not exceed 6months from the date the EE started working,

unless it is covered by an APPRENTICESHIP Agreement stipulating a longer period. The services of an EE who has been engaged on a probationary basis may be terminated for a JUST CAUSE or when he FAILS to QUALIFY as a regular EE in

accordance w/ reasonable standards made known by the ER to the EE at the time of his engagement. An EE who is allowed to work after a probationary period shall be considered as a regular EE.

Probationary EE one who is on trial by an ER during w/c the ER determines w/n he is A probationary appointment is made to afford the ER an opportunity to observe the a proper & efficient EE. of time is immaterial. qualified for permanent ENT.

fitness of a probationary EE while at work, and to ascertain whether he will become

Probationary implies the purpose of the term or period but NOT its length. The length The ER has the R to choose who will be hired and who will be denied ENT. It is w/in he exercise of the R to select his EEs that the ER may set or fix a probationary pd w/in w/c the latter may test and observe the conduct of the former before hiring him The ER may also extend a regular/permanent appointment to an EE once the ER finds that the EE is qualified for regular ENT even before the expiration of the probationary pd. permanently.

Also, if the purpose of the ER is neither attained nor attainable w/in the said period, the LC does not likewise preclude the ER from terminating the probationary ENT on justifiable causes.

Manila Electric Co v NLRC: Ramon as a probationary EE for 5months, frequently

played hookie taking the rest of the day off and not returning to the ofc after his

errands. Despite efforts of his superiors to instruct and appraise him of the standard the termination of his probationary ENT after 4 months. months.

of perf required, he did not follow orders, and was uncooperative. He was advised of RULING: There was sufficient cause for terminating his probationary ENT after only 4 Intl Catholic Migration Commission v NLRC: Bernadette, a probationary cultural

orientation teacher under probationary ENT, whose services were terminated for supervisors.

failure to meet the standards of performance as reflected in the evaluation of her RULING: There was just cause.


If an EE hired allegedly on probationary basis was not informed of the standards that should qualify her as a regular EE, the EE is deemed to have been hired from day 1 as a regular EE.

Probationary EEs, notwithstanding their limited tenure, are also entitled to security of a probationary EE cannot be terminated.

tenure. Thus, except for just cause, as provided by law or under the ENT contract,

AM Oreta v NLRC: The EE is hired under a probationary contract, providing that he

shall undergo a probationary period of 3 months before he can qualify as a regular EE, but it did not provide the standards by w/c he will qualify as one.

RULING: He is deemed as regular EE from day 1 he was hired and is entitled to security of tenure.

Manila Hotel v NLRC: Cruz was employed as a gardener by Manila Hotel on probation status for 6 months. His job perf & efficiency shall be reviewed and appraised in accdance w/ the standards of the hotel at the end of the 6-mont probationary period. However, 1 day before the expiration of such period, his position was abolished allegedly due to economic and recession reasons. RULING: The timing of his dismissal by the Hotel is highly suspicious, as it took

place a day before he can be eligible as a regular ee. There is a showing of his presumption is that his perf was satisfactory.

competence as he was promoted to a lead gardener in less than 6 months. And the


The ERs power to terminate probationary ENT contract is subj to limitations that:

1. It must be exercised in accordance w/ the specific requirements of the contract; 2. If a particular time is prescribed, the termination must be w/in such time and if formal notice is required, then that form must be used; the contract or the law;

3. The ERs dissatisfaction must be real and in GF, not feigned so as to circumvent 4. There must be no unlawful discrimination in the dismissal. appraised against those standards.

The standards of perf should be explained and accepted, and the perf shld be

An EE who is allowed to work after a probationary pd shall be considered a regular EE. Even if such EE, is transferred to a sister-company after the expiration of such period.


The provision of Art 281 that probationary ENT shall not exceed 6months means of 6 months after hiring. But if he continues to be employed beyond 6 months, he ceases being a probationary EE and becomes a regular or permanent EE.


that the probationary EE may be dismissed for cause at any time before the expiration

6-month probation is a GR. Probation longer than 6months can be justified, as when the same is established by company policy or when the same is required by the nature of work to be performed by the EE.

Buiser v Leogardo: It is shown than Company needs at least 18 months to determine

the character and selling capabilities of petitioners as sales representatives. The Co is engaged in advertisement and publication in the Yellow Pages of PLDT, and publication of solicited ads are made only a year after the sale has been made and the sales reps.

only then will the co be able to evaluate the efficiency, conduct and selling ability of


Q: May the ER and the EE validly agree to extend the probationary period beyond 6 A: Yes as in the Mariwasa Case, when the extension of the EEs probation was an act of liberality on the part of the ER affording him a second chance to make good after having initially failed to qualify as a regular EE. LAST DAY OF PROBATION

Q: When the probationary pd of an EE is for example 6months, when is the last day? A: The SC has used 2 different computation methods: before. (CALS Poultry & Alcira cases) 1. A probation of say, 6 months, ends on the SAME DATE it started 6 months 2. It ends 180 days from the starting date (Mistubishi Motors case - latest). PROBATION OF TEACHERS

Policy Instructions #11: the probationary ENT of professors, instructors and Full-time teachers who have rendered 3 consecutive yrs of satisfactory services shall be considered permanent. 3 Requisites teachers shall be subj to the standards established by DEPED

1. The teacher is a FULL-TIME teacher;

2. The teacher must have rendered 3 consecutive yrs of service; 3. Such service must have been SATISFACTORY

Full-time Teacher one whose total working day is devoted to the school, has no other regular renumerative ENT, and is paid on a regular monthly basis regardless of the number of teaching hrs. 18 hrs/month.

- In college, the normal teaching load of a full-time instructor shall be

A part-time member of the faculty cannot acquire a permanent ENT status under the Manual of Regulations in rel to the LC.

Reversion from Full-time to Part-time NOT allowed.

Bongar v NLRC: Bongar was employed as an instructor by AMA. His ENT contract w/c

was renewed several times, initially was probationary but was renewed for a pd of AMA denied her of the regular status on the contention that of the 3 yrs, he was only a full-time instructor for only 2 yrs and the rest as part-time. he had rendered service for nearly 4 yrs.
interpreted liberally in favor of the EE.

more than 3 yrs (the probationary pd for full-time teachers to become regular). But

RULING: The allegation that his contract has expired was negated by the fact that
ENT contracts are mostly ADHESION contracts. And should therefore be TERMINATION OF ENT


An ER may terminate the ENT for any of the ff causes: ER or rep in connection w/ his work;

a. Serious misconduct or willful disobedience by the EE of the lawful orders of his b. Gross and habitual neglect by the EE of his duties; authorized rep;

c. Fraud or willful breach by the EE of the trust reposed in him by his ER or duly d. Commission of a crime or offense by the EE against the person of his ER or e. Other causes analogous to the foregoing. MANAGEMENT RIGHTS any immediate member of his family or his duly authorized rep; and

1. R to MANAGE people

Except as limited by special laws, an ER is free to regulate, accdg to his own discretion and judgment, all aspects of ENT, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes t be followed, supervision of workers, working regulations, transfer of EEs, work supervision, layoff of workers, and the discipline, dismissal and recall of workers.

Every business enterprise endeavors to increase its profits. In the process it may adopt/devise means designed towards the goal. The free will of the

mgt to conduct its own business affairs to achieve its purpose cannot be denied. So long as the companys prerogatives are exercised in GF, for the the Rs of EEs, they will be upheld. -

achievement of the ERs interest, and NOT for the purpose of circumventing The ERs oblig to give his workers just compensation and treatment carries w/ it the corollary R to expect from the workers adequate work, diligence 2. R to DISCIPLINE and good conduct.

The ER has prerogative to instill discipline his EEs and to impose and regulations

reasonable penalties, including dismissal, on erring EEs pursuant to co rules 3. R to TRANSFER EEs -

The court has recognized the mgt prerog to transfer an EE from one office to another w/in the business establishment, provided that there is NO privileges. DEMOTION in rank or a DIMINUTION of his salary, benefits and other

This prerog is based on ERs assessment of the EEs qualifications, aptitudes and competence to move them around in various areas of maximum benefit to the co. business operations in order to ascertain where they will function w/

4. R to DEMOTE -

It is w/in mgt prerogative, provided it is not tainted w/ ULP, and must be anchored on valid grounds. Must be done in GF


NOT absolute (subject to law)


Dismissal/Discharge Art 282 Separation Art 283, 284


Misconduct improper or wrong conduct; it is the transgression/disobedience of some character and implies wrongful intent and NOT mere error in judgment.

established and definite rule of action; a forbidden act, a dereliction of duty, willful in

The Er may dismiss an EE if the former has reasonable grounds to believe, or to nature of his participation therein renders him absolutely unworthy of the trust and confidence demanded by his position. o o o o o Pressure and influence exerted by a college teacher on his colleague to change a failing grade to a passing one superior may be dismissed Ee who utters obscene, insulting or offensive words against a Sleeping in post, gross insubordination, dereliction of duty and Sexual harassment

entertain the moral conviction, that the latter is responsible for the misconduct and

challenging superior officers are grave offenses by a security guard Extra-marital relationship bet 2 married teachers

GR: Immorality on the part of an EE does NOT justify a discharge therefor unless such conduct is prejudicial or in some way detrimental to the ERs interests. o o being hot-tempered borrowing money

Chua-Qua v Clave: Evelyn, a teacher and class adviser in the 6th grade where one

Bobby was enrolled. She and Bobby (who was about half her age) fell in love and eventually got married. RULING: Teacher falling in love w/ student is NOT immoral. The heart has reasons of its own w/c reason does not know. But due to strained relationship bet school & teacher, reinstatement is no longer possible.

Immoral conduct that conduct w/c is so willful, flagrant, or shameless as to show indifference to the opinion of good and respectable members of the community must not only be immoral, but grossly immoral. That it be so corrupt as to degree or committed under such scandalous or revolting circumstances as to shock the common sense of decency.

constitute a criminal act or so unprincipled as to be reprehensible to a high

Being married to a co-employee is not a ground for dismissal in the failure of the ER to prove a legitimate business concern in imposing the questioned policy.


In order that willful disobedience by the EE may constitute a just cause for terminating his ENT, the orders, regulations, or instructions of the ER/rep must be: 1. Reasonable and lawful -

Reasonableness, however, has reference not only to the kind & character of the directions and commands, but also to the MANNER in w/c they are made. o

Disobeying a valid order (done in GF) to transfer is just cause for dismissal

2. Sufficiently known to the EE; and

3. In connection w/ the duties w/c the EE has been engaged to discharge. ERs policy is enforceable despite the unions objection, and disobedience by EE may Willful disobedience of the ERs lawful orders, as a just cause for dismissal of an EE, requires the concurrence at least 2 REQUISITES 1. The EEs assailed conduct must have been WILLFUL or intentional, the be a just cause for his dismissal

2. The order violated must have been REASONABLE, lawful, made known to the EE and must pertain to the duties w/c he had been engaged to discharge.

willfulness being characterized by a wrongful and perverse attitude; and

Q: May an EE disobey an inconvenient transfer?

A: Homeowners Savings & Loan Assoc v NLRC: EE was assigned as an accountant in

the ER banks San Carlos, Pangasinan branch. She received a memo from the head ofc transferring her to Urdaneta. She would be reimbursed the cost of transo and would receive a salary increase. She asked that the transfer be deferred because

she was 6months pregnant. The request was granted. But even after her delivery,

she refused to comply w/ the transfer order, as she reasoned it would entail addtl opposed to San Carlos w/c is 5-6 kms away.

expenses and physical exhaustion since Urdaneta is 30kms away from her home as
RULING: The transfer is VALID there being no showing of BF or underhanded invalidate a transfer order.

motives on the part of the ER. Mere inconvenience to the EE does not necessarily

Escobin v NLRC: The transfer was done in BF for the ff reasons:

1. It was grossly inconvenient for the petitioners, who were residents & heads of 2. They were not provided w/ funds to defray their transpo & living expenses; families residing in Basilan, to commute to Manila;

3. ER argues that it sent transpo money to the petitioners, but the recipients of such funds are not parties to the case.; and was given only after the petitioners were already terminated from the service.

4. No reason was given by the ER explaining why it failed to inform the petitioners
It is obvious that the dismissal was effected to punish petitioners for their refusal to To summarize: heed their ERs unreasonable directive

of their specific security assignments prior to their departure from Basilan.

GR: Mere inconvenience to the EE does not necessarily invalidate a transfer order. itself invalid, and disobedience thereof is not a reason to dismiss the worker.

: BUT inconvenience caused by unreasonableness of the transfer order makes the order


GR: If done in good faith is valid, and disobedience thereof is a reason to dismiss the EE. And if the ER is able to meet the burden of proving its reasonableness.


GR: It is mgt prerogative to transfer an EE from one office to another w/in the business

establishment based on its assessment and perception of the EEs qualifications, etc.

But it must be exercised w/o grave abuse of discretion, bearing in mind the basic The ER must be able to show that the transfer is not unreasonable, inconvenient Nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits or prejudicial to the EE elements of justice and fair play.

BUT a transfer becomes unenforceable if it is coupled w/ or is in the nature of a PROMOTION, where the promotion is rejected by the EE.

Transfer a movement from one position to another of EQUIVALENT RANK, level, or salary, w/o break in the service (lateral movement)

Promotion the advancement from one position to another w/ an increase in duties & responsibilities as authorized by law, and usually accompanied by an increase in salary. (scalar ascent)

An EE cannot be promoted, even if merely as a result of transfer, w/o his consent. NEGLECT OF DUTIES negligence.

The ER cannot rightfully discharge an EE for trivial & unimportant acts of

Gross neglect an absence of that diligence that an ordinarily prudent man would use in In order to constitute a just cause for dismissal, the neglect of duties must NOT is not a just cause) his own affairs

ONLY be GROSS, but also HABITUAL. (Thus, a single/isolated acts of negligence

However, it is not necessary that the ER show that he has incurred actual loss,

damage or prejudice by reason of the EEs conduct. It is sufficient that the gross & habitual neglect by the EE of his duties TENDS to prejudice the ERs interest. not qualified to do the work w/c he undertakes, if he is incompetent, unskillful or

An EE may be dismissed because of inefficiency, neglect or carelessness. If he is inefficient, or if he executes his work in a negligent manner or is otherwise guilty of ENT.

or neglect of duty, he may lawfully be discharged before the expiration of his term Degree of skill, care, diligence and attention required ORDINARY & REASONABLE skill, care and intelligence o Unsatisfactory perf is NOT a just cause for dismissal.

Gross negligence the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences w/o exerting any effort to avoid them. ABANDONMENT

Is a form of neglect of duty intention of returning back

There must be a clear and deliberate intent to discontinue ones ENT w/o any The EE may be dismissed on the ground of abandonment or negligence of duty where he had been absent for a period of 1 year and the prolonged absence from work was w/o any valid notice or leave from the company, and said absence in not by reason of any illness or disease.

2 Elements must concur to constitute abandonment

1. The failure to work or absence w/o valid or justifiable reason; and

2. A clear intention to sever the ER-EE relshp, w/ the second element as the Mere absence is NOT sufficient. more determinative factor and being manifested by some overt acts.

It is the ER who has the burden of proof to show a deliberate and returning.

unjustified refusal of the EE to resume his ENT w/o any intention of

BUT immediate filing of complaint NEGATES abandonment TARDINESS & ABSENTEEISM must be HABITUAL

are also forms of neglect of duty

Q: is ATTITUDE PROBLEM a just cause to dismiss an EE?

A: yes, when it results to personal differences bet EEs & mgt that affect the work

environment. But must comply w/ the twin requirement of NOTICE & HEARING.

DISHONESTY & LOSS OF CONFIDENCE duly authorized rep.

This is fraud or willful breach by the EE of the trust reposed in him by his ER or To constitute a just cause for dismissal, the fraud must be committed against the ER or rep AND in connection w/ the EEs work. (fraud committed against 3rd persons is not a ground). o o Falsification of time cards (dishonesty)

Theft of company property (dishonesty)

Loss of Confidence

To be a valid reason of dismissal, must be GENUINE. him thereby unfit to continue working for the ER.

Must be related to the performance of the duties of the EE such as would show Should apply ONLY

1. To cases involving EEs occupying POSITIONS OF TRUST & confidence; Managerial EEs (those vested w/ powers/prerogatives to lay down

mgt policies and/or hire, transfer, suspend, lay-off, recall, discharge,

assign of discipline EEs or effectively recommend such managerial 2. To those situations where the EE is routinely charged w/ the care & custody of the ERs money or property. Cashiers, auditors, property custodians (or those in the normal and routine exercise of their functions, regularly handle significant amts of money/property. an ordinary chambermaid actions

CONFLICT OF INTEREST: ENT W/ COMPETITOR Q: Is it lawful to prohibit ENT w/ a competitor? A: The ER has to adduce evidence to prove that the restriction is REASONABLE and not greater than necessary to protect the ERs legitimate business interests. The restraint may not be unduly harsh or oppressive in curtailing the EEs legitimate BUT is is just as important to protect the enjoyment of an establishment in

efforts to earn a livelihood and must be reasonable in light of sound public policy. trade or profession, w/c its ER has built up by his own honest application to ordinary man. What one creates is his.

every day duty and the faithful perf of tasks w/c every day imposes upon the


Loss of confidence is a valid ground for dismissing an EE and proof beyond reasonable doubt of the EEs misconduct is NOT required. It is sufficient if there is some basis for such loss of confidence or if the ER has reasonable

ground to believe or to entertain the moral conviction that the EE concerned is responsible for the misconduct and that the nature of his participation therein But nonetheless, loss of confidence must be supported by SUFFICIENT PROOF. rendered him unworthy of the trust and confidence demanded by his position.


While loss of confidence is one of the just causes for dismissal of an EE, the dismissal 1. Loss of confidence should NOT be SIMULATED; unjustified; must rest on ACTUAL BREACH of duty committed by the EE.

2. It should NOT be used as a subterfuge for causes w/c are improper, illegal or

3. It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; 4. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith; 5. The EE involved holds a position of trust and confidence. vital and the burden rests on the ER to establish it. and

While proof beyond reasonable doubt is NOT required, still substantial evidence is


Against the person of his ER or against any immediate member of the ERs family. is dropped by the fiscal.

Conviction is not necessary to warrant his dismissal, even if the criminal complaint An ER may dismiss an EE for breach of trust in the handling of funds in spite of An EE who has been exonerated from a criminal charge of theft may still be dismissed if the ER has ample reason to mistrust him. his having been acquitted in the course of criminal prosecution.

Immediate Members of the Family 1. Spouse 2. ascendants

3. descendants

4. legitimate, natural or adopted brothers/sisters 5. relative by affinity in the same degrees 6. relative by consanguinity w/in the 4th civil degree ANALOGOUS CAUSES

Will depend on the circumstances of each case. However, to be considered as the EE.

just cause, it must be due to the VOLUNTARY and/or WILLFUL act/omission of

Theft committed by an EE against another EE is NOT work-related, hence not a A case analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an EEs moral depravity. o Theft, if proven by substantial evidence, is analogous to serious misconduct. serious misconduct under Art 282 (e).


AUTHORIZED CAUSES OF TERMINATION Art 283. CLOSURE OF ESTABLISHMENT & REDUCTION OF PERSONNEL The ER may also terminate the ENT of an EE due to: 1. Installation of labor-saving DEVICES; 2. REDUNDANCY

3. RETRENCHMENT to prevent losses, or

4. The closing/CESSATION of operation of the establishment or undertaking By serving a WRITTEN NOTICE on the 1. worker &

UNLESS the closing is for the purpose of CIRCUMVENTING the law,

2. the MINISTRY of Labor & ENT at least 1 MONTH before the intended date thereof.

In case of termination due to installation of labor saving DEVICES or PAY equivalent to

REDUNDANCY, the worker affected thereby shall be entitled to a SEPARATION a) at least his 1 MONTH PAY or

b) to at least 1 month pay for EVERY YR of service, (w/c ever is HIGHER). In case of RETRENCHMENT to prevent losses & in cases of closures or

CESSATION of operations of establishment/undertaking NOT due to serious to:

business losses or financial reverses, the SEPARATION PAY shall be equivalent a) 1 MONTH pay or

b) at least MONTH pay for EVERY YR of service, (w/c ever is HIGHER. A fraction of at least 6 months shall be considered as 1 WHOLE year.


An ER may terminate the services of an EE who has been found to be suffering from a) prohibited by law, or any disease & whose continued ENT is

b) prejudicial to his health as well as to the health of his co-EEs. Provided, that he is paid SEPARATION PAY equivalent to: a) 1 MONTH salary or

b) month salary for EVERY YR of service (w/c ever is GREATER) A fraction of at least 6 months being considered as 1 WHOLE year.

Enumeration is not complete. There are many more OTHER AUTHORIZED CAUSES of ENT termination: 1. Total & permanent disability of an EE; 2. Disease not curable in 6 months; 3. Valid app of a union security clause; 4. Expiration of period in term of ENT; 6. Failure in probation; 5. Completion of project in project ENT; 7. Sale amounting to closure of business; 9. Defiance of return-to-work order, 11. Non-feasible reinstatement, 13. Resignation; competitor)

8. Relocation of business to a distant place; 10. Commission of illegal acts in strike; 12. Floating status or off-detail beyond 6 months, 14. Violation of contractual commitment (such as being consultant to a 15. Retirement

16. Death of EE. SEPARATION PAY used in 4 SENSES: 1. As a statutory benefit; 2. As ENT benefit voluntarily granted or required by contract; 4. As financial assistance to a legally dismissed EE.

3. As alternative to reinstatement of an illegally dismissed EE; and

Arts 283 & 284 are the only causes w/c REQUIRE the payment of separation pay, also called STATUTORY SEPARATION or SEVERANCE PAY (except closure or CESSATION because of serious losses).


The ER has the R to use labor-saving devices w/ a view to effecting more economy & efficiency, provided that the R to reduce the personnel is NOT ABUSED.

REDUNDANCY exists where the services of an EE are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it is superfluous, and superfluity of a position/s may be the outcome of a number of factors like o o o overhiring of workers, decreased volume of business, or

dropping of a particular product line or service activity previously manufactured/undertaken by the enterprise

redundancy duplication of work. (that no other person was holding the NOT show that his position had not become redundant)

same position that the EE held prior to the termination of his services, does ER may terminate an EE due to redundancy, however, the ER must comply w/ the EE concerned at least 1 month prior to dismissal.

the procedural requirement of a WRITTEN NOTICE to the Ministry of Labor, AND

It is immaterial that the financial troubles of the company were not the fault of the EE, the latter cannot insist on the retention of the position upon the ground that he had not contributed to the financial problems of the company.

Creation of positions w/ functions related or similar to those of the abolished positions does NOT necessarily invalidate the declaration of redundancy. o Santos v Pepsi Cola: Petitioners, who were dismissed due to redundancy

of their positions filed for illegal dismissal w/ backwages when they learned that Pepsi created new positions w/ substantially the same duties and responsibilities as the ones they used to have.

RULING: The question of w/n the old and the new positions are similar

properly belong to the LA or NLRC, w/c in this case both found substantial difference bet the two. (1) the org set-up has been changed, where the new positions do not have to report to the CD managers, (2) the new

positions do not include the task of driving trucks and physically delivering

stocks to wholesale dealers, but merely to ensure that the stocks are displayed in the best location in the dealers store. in GF.

being different, it follows that the redundancy program is instituted by Pepsi

, the 2 positions

Valid abolition of position and transfer to lower position o

Great Pacific Life Assurance Corp v NLRC: Ms. Allado was transferred to

Makati because of the abolition of her position as Regional Cashier in

Baguio. RULING: A mgt prerogative to abolish a position w/ it deems no Here, GREPALIFE sought to accommodate Allado by ordering her to

longer necessary and absent findings of malice on the part of mgt, is valid. transfer to a position recently vacated. Whether that position is lower than her former position, is immaterial because GREPALIFE could just have transfer was merely an accommodation. terminated her services when it abolished her position, and the proposed

Replacing a Regular EE w/ an Independent Contractor o

Serrano v NLRC & Isetann: Pet was a security checker to apprehend

shoplifters & prevent pilferage of merchandise for Isetann Dept Store. He

was initially hired on contractual basis, and eventually became a regular EE. Later, he became head of the Security Checkers Section, but later received a letter terminating his ENT due to retrenchment. He filed for illegal dismissal, ulp etc. LA made a finding of illegal dismissal for failure of

Isetann to justify the retrenchment, and failure to accord due process to petitioner, w/c decision was reversed by the NLRC finding that it was a legit business decision whose wisdom the NLRC does not need to inquire

into. ISSUE: Is the hiring of an independent security agency by the ER to

replace its current security section a valid ground to dismiss the EEs in that section? RULING: The company has the ultimate determination of whether the services shld be performed by its personnel or contracted to outside agencies. In this case, the EE was terminated for an authorized cause: redundancy.

Invalid Declaration of Redundancy. The mgt determines what services are no longer necessary, but as always, the law, and GF must be observed. o Asufrin v San Miguel: SMC adopted a pre-selling operations scheme

that resulted in all route & warehouse positions being declared redundant.

SMC offered an early retirement package (250% of regular pay) to the

affected EEs. Asufrin did not avail himself of the package and requested ground of redundancy. RULING: SC ordered his reinstatement citing 4 reasons why it was not convinced of the alleged redundancy:

that he be retained in any position. Nonetheless his ENT was terminated on

Of the 14 EEs who did not avail of the retirement package, only have been singled out.

Asufrin was no redeployed to other offices or outlets. He appeared to

Asufrin was in the payroll of Sta Fe Brewery although actually posted at the Sum-ag Warehouse where his post was declared redundant; he could have been retained in Sta Fe.

Despite contrary allegation, warehousing activities continued in Sumag as transit point where dealers got their stocks; determining the EEs to be laid off. No criteria, e.g. ENT status, efficiency and seniority was adopted in

A position cannot be said to be redundant where it is required by express mandate of the law, as in Pollution Control & Safety Manager.


ER bears the burden to prove his allegation of economic or business reverses. Retrenchment is recognized as a PREVENTIVE & CURATIVE measure. Actual may do it. losses or profuse bleeding of business does NOT have to happen before the ER

Causes of Retrenchment Lack of Work Where the continuation of the men in the service is patently inimical to the

interest of the ER, he may lay off such number of workers as the circs may warrant. But the court may impose the condition that the ER shall not admit any new laborer in case of available work in the future before the laid-off men who are able, willing and available to do the same shall have been recalled to work.

Business Recession Fire

Conservatorship contemplate not the liquidation of the company involved, but a conservation of company assets & business during the period of stress

Basic Requisites of Valid Retrenchment proven; -

1. The retrenchment is necessary to prevent/minimize losses and such losses are w/n an ER would imminently suffer serious or substantial losses for determine

economic reasons is essentially a question of fact for the LA & NLRC to 2. Written notice is given to the EEs and the DOLE, and -

The written notice is mandatory, and must be given at least 1 month in other means of ENT, and to ease the impact of the loss of their jobs

advance of the intended date of retrenchment to enable EEs to look for Even if at the time the notice shld have been given, the EEs were already on temporary lay-off, it is not an excuse to forego the 1-month written 3. Separation pay is paid. notice because, by this time, their lay-off is to become permanent.

Even if EEs go on strike and the retrenchment was found justified, they shld still be entitled to separation pay, inasmuch as the retrenchment occurred much ahead of the strike.Asionics PH Inc v Minister of Labor

* 2 more requisites as added by Asian Alcohol Corp v NLRC

4. The ER exercises its prerogative to retrench EEs in GF for the advancement of its 5. The ER uses fair and reasonable criteria in ascertaining who will be dismissed or retained among the EEs, such as status (temporary/casual/regular), efficiency, seniority, physical fitness, age, and financial hardship for certain workers. interest and not to defeat or circumvent the EEs R to security of tenure; and

Seniority Rs an EE has no inherent R to seniority. Such may be based on a contract, statute, or an administrative regulation relative thereto. It is acquired by en EE EEs to retrench, the ER cannot completely disregard seniority as a factor. 4 Standards of Retrenchment through long-time ENT, are contractual, and not constitutional. But in selecting the

Lopez Sugar Corp v Federation of Free Workers: ER allegedly to prevent losses due to

Preventive retrenchment is lawful, but certain retrenchment may be invalidated.

major economic problems, and exercising its privilege under the CBA, retrenched & retired a number of its EEs. It filed a combined report on retirement and app for of ULP stating that the terminations were intended to bust the union. RULING:

clearance to retrench 86 of its EEs. Meanwhile, Private respondent filed a complaint

1. TO PREVENT LOSSES justifies retrenchment it means that retrenchment or termination of services of some EEs is authorized to be done by the ER sometime before the losses anticipated are actually sustained. On the other hand, not every asserted possibility of loss is sufficient legal warrant to for 2. STANDARDS w/c JUSTIFY RETRENCHMENT reduction of personnel.

a. The losses expected shld be SUBSTANTIAL;

b. The substantial loss apprehended must be REASONABLY IMMINENT,

as such imminence can be perceived objectively and in GF by the ER. is a drastic recourse w/ serious consequences for the livelihood of the

(There shld be a certain degree of URGENCY for the retrenchment, w/c EEs retired or otherwise laid-off);

c. The retrenchment must be REASONABLY NECESSARY and likely to effectively prevent the expected losses. The ER should have taken other measures PRIOR or parallel to retrenchment to forestall losses

(cut other costs, discontinue fat exec bonuses, reduction of both mgt & efficiency, trimming marketing & advertising costs, etc). Retrenchment d. Alleged losses (if already realized) and expected imminent LOSSES sought to be forestalled, must be PROVEN by SUFFICIENT & CONVINCING EVIDENCE. shld be a measure of LAST RESORT, after less drastic means.

rank-n-file bonuses & salaries, going on reduced time, improving manuf.

3. DETERMINATION of LOSS lies w/ the LA & NLRC w/n an ER would the LA & NLRC to determine.

imminently suffer serious/substantial losses is essentially a question of fact for

4. EFFECT of QUITCLAIMS EEs signing of quitclaims will not by itself disbar them from filing a complaint. Quitclaims executed by laborers are commonly frowned upon as contrary to pub policy REINSTATED and paid BACKWAGES..

5. EFFECT of UNJUSTIFIED RETRENCHMENT all retrenched EEs shld be

Evidence to Prove Losses: Modicum of Admissibility

Uichico v NLRC and Santos: To prove losses, the ER submitted the Statement of Profit

& Losses but the same does not bear the signature of a CPA or audited by an independent auditor. It has no evidentiary value.

Hiring of Replacements after Retrenchment

It is a showing of BF and belies the necessity of retrenchment to prevent or offset losses. Why would the ER take in addtl workers if it had to retrench?

Contracting out After Retrenchment/Redundancy

Asian Alcohol v NLRC: may be validly done to promote economy & efficiency as held

in the De Ocampo case

REDUNDANCY As to Cause: Redundancy results from the fact that the position of the EE has become superfluous, an excess over what is not suffered reverses. As to Effect:

RETRENCHMENT Retrenchment is linked w/ losses; it is a cost-cutting measure immediately reverses. necessary by business reduction or

actually needed, even if the business has

Higher separation pay

Lower separation pay

Retrenchment is either PERMANENT(283) or TEMPORARY (286). When the 6recalled, he is deemed separated or constructively dismissed. o

month period mentioned in Art 286 is over and the EE (still willing to work) is not Sebuguero v NLRC, GTI Sportswear Corp: Petitioners were among the 38

regular EEs of GTI. They were given temporary lay-off notices due to alleged lack of work & heavy losses caused by the cancellation of orders from abroad and by the garments embargo of 1990. Believing that their temporary lay-off a violation of their R to security of tenure, they filed complaints for illegal

was a ploy to dismiss them, resorted to because of their union activities, & was dismissal, ULP, etc. GTI asserted its prerogative to lay-off its EEs temporarily for a period not exceeding 6months to prevent losses due to lack of work or job orders fr abroad, and that the lay-off affected both union & non-union members. subsequent cancellations of job orders made by its foreign principals, a fact w/c was communicated to petitioners who were all offered severance pay. 22 of the 38 accepted the severance pay.
LA: there is constructive dismissal. The circumstances warranted the temporary

It justified its failure to recall the EEs after the lapse of 6months because of the

lay-off. However, ER shld have recalled the EEs after the end of the 6-month period, or at least reasonable informed them that it is still not in a position to recall them due to continuous drop of demand, thereby extending the

temporary lay-off w/ a definite period of recall, and if the same cannot be met, then the company shld implement retrenchment and pay its EEs separation pay.

NLRC: Having established lack of work, it necessarily follows that retrenchment that an EE can be presumed to have been terminated. the theory of redundancy in justifying their dismissal.

did take place and NOT constructive dismissal. It is only after the 6-month pd

Petitioners filed an action for certiorari, contending the NLRC erred in sustaining RULING: What the NLRC affirmed is NOT redundancy but RETRENCHMENT as a ground for termination of ENT. Redundancy is different form retrenchment, or fault of its EEs and w/o the prejudice to the latter, resorted to by mgt during laying-off. Retrenchment is the termination of ENT initiated by the ER through no periods of business recession, industrial depression, or seasonal fluctuations, or

during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation. Simply put, it is the act of the ER of considerable reduction on the volume of his business.

dismissing EEs because of losses in the operation of a business, lack of work & Art 283 speaks of a PERMANENT retrenchment as opposed to a temporary

lay-off as is the case here. There is no specific provision of law w/c treats of a a period/duration therefor. These EEs cannot forever be temporarily laid-off. To remedy the situation or fill the hiatus, Art 286 may be applied but only by floating status. 6 months is the period set by law that the operation of a analogy to set a specific period that EEs may remain temporarily laid-off or in

temporary retrenchment or lay-off and provides for the requisites in effecting it or

business may be suspended, thereby suspending the ENT of the EEs concerned. The temporary lay-off wherein the EEs likewise cease to work should also not last longer than 6 months. After 6 months, the EEs shld either be recalled to

work or permanently retrenched ff the requirements of the law, and that failing to comply w/ this would be tantamount to dismissing the EEs and the ER would thus be liable for such dismissal. , To determine whether the petitioners were validly retrenched or were

illegally dismissed, we must determine whether there was compliance w/ the law temporarily laid off.

regarding a valid retrenchment at anytime w/in the 6-month period that they were

Problem: Preventive Personnel Reduction blurs the line bet retrenchment & Accdg to jurisprudence, retrenchment may be done by the ER BEFORE losses are actually sustained. It need not keep all its EEs until after his losses shall have bet retrenchment & redundancy. materialized. But a problem emerges: preventive personnel reduction blurs the line redundancy

Reduction of Work Days: Constructive Retrenchment

International Hardware v NLRC: Pedroso was employed by petitioner when the number

of his working days was reduced to just 2 days a week due to financial losses

suffered by petitioners business. He claimed he was retrenched and shld be paid

separation pay. LA & NLRC ruled that inasmuch as the working days of Pedroso had been substantially reduced for more than 6 months and since the financial crisis of IH has not ceased, he is entitled to separation pay if he was actually retrenched. RULING: ER could not have been expected to notify DOLE of Pedrosos

retrenchment for there was no intention to do so on the part of the ER. Nevertheless, considering that Pedroso has been rotated by the ER for over 6months due to serious losses, so that he had been effectively deprived of a gainful occupation

thereby, and considering further that the business of the ER was ultimately closed & sold off, the SC affirmed the NLRCs ruling that Pedroso was thereby constructively dismissed or retrenched for ENT. Thus he is entitled to 1 month pay or at least month pay for every year of service, w/c ever is higher.

Closure because of Losses

283 allows an ER to terminate the services of his EEs in case of closure of clearance or report required under the LC and its implementing rules before required).

business as a result of grave financial losses. But he ER must comply w/ the terminating the ENT of the EEs. (NOTE: DOLE Clearance to terminate is no longer

Losses must be shown

While business reverses can be a just cause for terminating the services of EEs, the losses must be sufficiently proven by the ER. Art 277(b) states in part that the burden of proving that the termination was for a valid or authorized cause shall rest on the ER. Failure of the ER to show proof of its actual & imminent losses that would justify drastic cuts in personnel or costs, is fatal to its cause.

Financial losses are a question of fact that must be proved before the LA or the NLRC.

R to close whether losing or not

It does not mean that closure is allowed only in case the business is losing. If the business is NOT losing but its owner, for reasons of his won, wants to get out of the business, he in GF can lawfully do so anytime. Just as no law forces anyone to go into business, no law compels anybody to stay in business. But the EE shld be paid the severance pay.

3 Requirements of Cessation of Business NOT due to business reverses: before the intended date thereof; character; and

1. Service of a WRITTEN NOTICE to the EEs and to the DOLE at least 1 month 2. The cessation or withdrawal from business operations must be BONA FIDE in 3. Payment to the EEs of SEPARATION PAY amounting to at least: a. 1 MONTH pay, or b. month pay for each yr of service, WHICHEVER IS HIGHER.

CLOSURE OF BUSINESS It is the reversal of fortune of the ER whereby there is a COMPLETE cessation of business operations and/or an actual usually due to financial losses. locking-up of the doors of establishment,

RETRENCHMENT or downsizing It is the reduction of personnel usually due to poor financial returns so as to cut down on costs of operations in terms of of the company. (also called downsizing) salaries and wages to prevent bankruptcy

It is an authorized cause for termination of ENT w/c aims to prevent further financial drain upon an ER who cannot already stopped.

It is an authorized cause for termination is not making good in its operations in order to cut back on expenses for

of ENT w/c the law accords an ER who

pay anymore his EEs since business has

salaries & wages by laying off some EEs. Its purpose is to save a financially ailing business establishment from eventually

collapsing. Not limited to those resulting from business losses or reverses. Partial Closure

Dangan v NLRC: Art 283 w/c permits closure or cessation of operation of an

establishment or undertaking not due to serious business losses or financial reverses, w/c includes BOTH the complete cessation of operations and the cessation of only PART of a companys activities.


Separation pay may NOT be paid


Separation pay must be paid


Separation pay may NOT be paid


Separation pay must be paid.

GR: The grant of separation pay under Art 283 is a statutory obligation on the part of

except only where the closure or cessation of operations was due to serious

the ER and a demandable R on the part of the EE.

business losses or financial reverses and there is sufficient proof of this fact or

In the absence of proof of such serious business losses or financial reverses, the ER closing his business is obligated to pay separation pay to his EEs.

Temporary Shutdown

- NOT a good reason to dismiss EEs, where operations continued after such repairs, and it is apparent that the closure was a mere ploy to get rid of EEs.

Q: Does previous generosity obligate the company?(if the company paid a generous

separation pay to batch one, must it do the same to batch 2 of the separated EEs?

A: The law requires an ER to extend equal treatment to its EEs. It may not, in the guise of exercising mgt prerogatives, grant greater benefits to some and less to others. BUT! Business Information Systems case BISSI, after experiencing financial reverses, decided as a retrenchment their separation pay equivalent to

North Davao case When the mining company ceased EEs were separated & given the operations due to losses, its remaining equivalent of only 2.5 days pay for every yr of service. In prior yrs, in contrast, it had been giving separation pay of service.

measure to lay-off some EEs and gave month pay for every yr of service. BISSI retained some EEs in an attempt to two and a half months later, these rehabilitate its business. However, barely remaining EEs were likewise discharged. batch received separation pay equivalent to a full months salary for every yr of service, plus a mid-yr bonus.

equivalent to 1 months pay for every yr

Unlike the earlier dismissed EEs, the 2nd

The recently separated EEs cried discrimination. RULING: the cos practice of giving 1-

The first batch of EEs complained of discrimination. RULING: There was no reason for BISSI to skimp on separation pay for the 1st batch of EEs. That it was able to pay 1month separation benefit for EEs at the time of closure meant that it must have amount to those who were separated

month pay for every yr of service could

no longer be continued precisely because forced to shut down on account of

the co could not afford it anymore. It was staggering losses. , the fact that less separation pay were granted when the company finally met its business death

been also in a position to pay the same prior to closure. There was discrimination.

cannot be characterized as discrimination.

Justification for closure, not credible: ULP

Carmelcraft Corp v NLRC: After its registration as a labor union, the Carmelcraft EEs

Union sought but did not get recognition from the corp. Consequently, it filed a petition for certification election. ER announced to its EEs that it would cease

operations due to serious financial losses. Operations did cease as announced. The union filed a complaint w/ the DOLE for illegal lockout, ULP& damages, and other

benefits. LA declared the shutdown illegal & violative of the EEs R to selforganization. RULINGS:

1. Justification for Closure is NOT established. That it sustained losses was not months before it decided to close its business. The court believes that the 2. ULP - the act was ULP and violation of the EEs R to self-org. corp would rather shut down than deal w/ the union.

proved because there is no report of its operations during the succeeding 7

3. State intervention in business closure when justified the determination to

cease operations is a prerog of mgt that is usually not interfered w/ by the

State, but where it is manifest that the closure is motivated not by a desire to avoid further losses but to discourage the workers from organizing themselves into a union for more effective negotiations w/ the mgt, the State is bound to intervene

Closure by operation of the CARP

Natl Federation of Labor v NLRC: The closure contemplated under Art 283 is a

unilateral & voluntary act on the part of the ER to close the business establishment. the ER and ultimately for the benefit of the EEs.

It does not contemplate a situation where the closure of the business is forced upon

Expiration of Lease

If the workers tenure of ENT is coterminous w/ the lease of the hacienda, their

ENT expires as soon as the lease expires and the lessee turns over the hacienda to the owner. What severs the ER-EE relshp is not the workers dismissal but the expiration of their working relshp w/ the lessee. The workers are not entitled to separation pay as the case entails expiration of tenure and NOT dismissal.


No law prohibits bona fide sale of a going enterprise.

The SELLER, as ER, is obliged to pay his EEs separation pay and other benefits The TRANSFEREE may, but is not obliged to, give ENT preference to the former EEs; if hired, they may be required to pass probation. founded on law, policy, or contract.

obligation to continue employing the EEs of the seller.

When that happens, the PURCHASER (unless he agrees to do so), has no legal

If the sale is tinged w/ BAD FAITH, however, the law & rulings on ULP and the San Felipe Neri School of Mandaluyong v NLRC, Roman Catholic Archbishop of Manila: doctrine of successor ER may apply.

SFNM sold its properties and assets to the RCAM. Immediately thereafter, RCAM, as permit to operate the same.

the transferee-purchaser, continued the operation of the school, but applied for a new RCAM required the respondent teachers to apply as new EEs subj to the usual

probation. Demoted to probationary status and their past services not recognized by

the new ER, the teachers inquired abt their Rs from the former school owners, but to no avail. Instead, they were referred to the new owners of the school, supposedly as the proper party who shld answer for and adjust their demands. separation pay. The teachers filed against FNSM (and RCAM as alternative defendant) for

RULING: The Deed of Sale reveals no express stipulation whatsoever relative to the continued ENT by RCAM of the teacher-EEs of FNSM. On the contrary, records show that RCAM expressly manifested its unwillingness to absorb the petitioners been effectively terminated and there was in effect a closure.

school EEs or to recognize their prior service. The respondent teachers ENT has There is no law w/c requires the purchaser to absorb the EEs of the selling corp.

The most that the purchasing co may do, for purposes of public policy & social

justice, is to give preference to the qualified separated EEs of the selling co, who in did.

their judgment are necessary in the continued operation of the business. This, RCAM Hence, the SFNSMs contention that private respondents are not entitled to

separation pay on the ground that there was no termination of the latters ENT but a mere change of ownership in the assets & properties of the school is untenable.
Sale of Business: Is it closure or cessation of business?

Manlimos v NLRC & Super Mahogany Plywood Corp: the issue of whether there was a

closing or a cessation of business operations w/c could have operated as a just bona fide.. The petitioners did not doubt that, and they even freely & voluntarily accepted their separation pay and executed a Release/Waiver.

cause for the termination of ENT was not material. The change in ownership was

An innocent transferee of a business establishment has NO liability to the EEs of

the transferor to continue employing them. Nor is the transferee liable for past

ULPs of the previous owner, except when the liability therefor is assumed by him

under the contract of sale, or when liability arises because of the new owners
Where such transfer of ownership is in GF, the transferee is under no legal duty

participation in defeating the Rs of the EEs.

to absorb the transferors EEs. The most he may do, for reasons of pub policy & social justice, is to give preference to the qualified separated EEs in the filling of vacancies.

Since the petitioners were effectively separated from work due to a bona fide

change of ownership, and they were accordingly paid their separation pay, w/c they freely & voluntarily accepted, the private resp corp was under no oblig to employ them; although it may give them preference in the hiring.

Successor-in-Interest, Contractual Oblig to Employ

Marina Port services v Iniego: If the transferee contractually committed itself to retain

the EEs of the transferor, such contractual agreement must be honored.


By the fact of merger, succession of ENT Rs & obligs occurs bet the absorbing Not only must the absorbing corp retain the EEs; it should likewise recognize the length of service in the previous ER. In merger (like sale in BF), the successor employer principle applies. corp and the EEs of the absorbed corp.

Filipinas Port Services Inc v NLRC: In compliance w/ govt policy, the diff

stevedoring and arrastre corps operating in the Port of Davao were integrated into a single dockhandlers corp, known as the Davao Dockhandlers, Inc., w/c was subsequently renamed Filport. Sec 118 of the PPA AO 13-77 mandated Filport to draw its personnel

complements from the merging operators. Thus, Filport labor force was mostly taken from the integrating corps, among them private respondents. Years later, 19 EEs filed a complaint w/ DOLE, alleging that although they

were EEs of Filport, when they retired, they were paid retirement benefits before the merger was not counted.

computed only from the time of the merger and the time of service they rendered RULING: SC enbanc, ruled in favor of the EEs claim. The alleged memo of the PPA Asst Gen Mgr exonerating Filport from any liability arising from and as a security of tenure. result of the merger is contrary to public policy, & violative of the workers R to

expressly assumed, labor contracts are not enforceable against a transferee of an enterprise, labor contracts being in personam) is NOT APPLICABLE in this case. The principle involved in the Fernando case applies only when the transferee is NOT where the transferee was found to be merely an alter ego of the diff

The Fernando v Angat Labor Union ruling (where it was held that unless

an ENTIRELY NEW corp w/a DISTINCT personality from the integrating firms and merging firms, as in this case. Thus, Filport has the oblig not only to absorb the the absorbed EEs w/ their former EEs as well.

workers, of the dissolved cos, but also to include the length of service earned by

Sec 3 of Act No. 2772: Upon the perfecting of a consolidation, the several corps parties thereto shall be deemed and taken as one corp, upon the terms & conditions set forth in said agreement; or upon the perfecting of the merger, the corp mered shall be deemed and taken as absorbed by the other corp and incorporated in it; and all its singular Rs, privileges and franchises of each said

corps and all property, real & personal, and all debts due on whatever account, belonging to each such corps shall be taken and deemed as transferred to and vested in the new corp formed by the consolidation, or in the surviving corp in case of a merger, w/o further act or deed. Provided however, that the Rs of

creditors and all liens upon the prop of either of said corps shall be unimpaired. AILMENT or DISEASE

If the EE suffers from a disease and his continued ENT is prohibited by law or

prejudicial to his health or to the health of his co-EEs, the ER shall not terminate

his ENT unless there is a certification by a competent public health authority that the disease of such nature or at such stage that it cannot be cured w/in 6months even w/ proper med treatment.

The burden of proving the validity of the dismissal rests on the ER. In absence of the required certification, by a competent pub health authority, the Court has ruled against the validity of the EEs dismissal.

Triple 8 Integrated Services v NLRC: The reqment for a med cert CANNOT be

dispensed w; otherwise, it would sanction the unilateral and arbitrary determination by the ER of the gravity or the extent of the EEs illness and thus defeat pub policy.

A med cert issued by the companys own physician is NOT a certificate by Even if there is NO illegal dismissal, there may be an award for separation pay. competent public health authority

Under Art 184, An ER may terminate the services of an EE who was found to be suffering from a disease and whose continued ENT is prohibited by law, or is is paid his SEPARATION pay. prejudicial to his health, as well as to the health of his co EEs; provided that he

Even VOLUNTARY RESIGNATION due to ill health may be paid termination pay

for reasons analogous to those contemplated under Art 284.

PROCEDURE TO TERMINATE EMPLOYMENT Lack of a valid cause (Substantive due process) dismissal is invalid, EE entitled Lack of proper procedure (Procedural due process) does NOT invalidate EEs R to due process to reinstatement

dismissal, EE still dismissed, but the ER becomes liable for indemnity for violating

The guarantee of due process applies to ALL workers, including managerial EEs need not be observed to the letter. It is enough that there was DUE NOTICE & HEARING before a judgment is made.

The rules laid down by the co for the investigation of an EE before his termination

Summary proceedings may be conducted. Non-verbal devices such as written

EEs R to due process prevails over the company rules that allow immediate dismissal of the erring EE

explanation, affidavits, position papers or other pleadings are sufficient hearing.


A. For termination of ENT based on JUST CAUSES: a. specifying the ground/s for termination and

2. A HEARING or conference during w/c the EE concerned, w/ the assistance of COUNSEL if the EE so desires, is b. present his evidence, or a. given opportunity to respond to the charge, c. rebut the evidence presented against him, and

b. giving to said EE reasonable opportunity to explain his side;

3. A WRITTEN NOTICE of termination served on the EE indicating that upon due termination.

consideration of all the circumstance, grounds have been established to justify his

In case of termination, the foregoing notices shall be served on the EEs last known address.

B. For termination of ENT based on AUTHORIZED CAUSES defined in 283 1. Service of a WRITTEN NOTICE to the EE, and 2. Service of a WRITTEN NOTICE to the Regional Office of DOLE GROUND/S therefor.

At least 30 days before the effectivity of the termination, specifying the

C. For termination brought about by the COMPLETION of CONTRACT or phase NO Notice required D. For termination brought about by FAILURE of EE to MEET the STANDARDS of A WRITTEN NOTICE is sufficient if served to the EE w/in reasonable time from the effective date of termination. the ER in case of PROBATIONARY ENT thereof.

Preventive suspension and investigation DO NOT replace 2-Notice requirement of De Vera v NLRC & BPI: Notice of preventive suspension is not considered due process; defect not cured by NLRC Hearings.

adequate notice, as it was merely to ascertain the extent of the loss of the bank the causes of his desired dismissal.

& to pinpoint responsibility of the parties involved, and NOT to apprise the EE of Likewise, subsequent interview is NOT the ample opportunity to be heard

contemplated by law. In the latter, the EE sought to be dismissed an opportunity is afforded the EE after he is informed of the charges against him in order to give him an opportunity to refute the accusations against him.
Consultation w/ union insufficient notice

That the EE simply kept silent NOT a waiver of his Rs. Notice & opportunity to be heard must be accorded by an ER event though the EE does not affirmatively demand them.

An EE must be given notice & an ample opportunity prior to his dismissal to be

adequately prepare for his defense. The law lays down the procedure, but it does not need to be observed to the letter, but at least, it must be done in the natural SEQUENCE of NOTICE, HEARING & JUDGMENT.

Ample opportunity every kind of assistance that mgt must accord to the EE to enable Reasonable opportunity should be construed to as a period of 5 CALENDAR DAYS him to prepare adequately for his defense.

from receipt of notice to give the EEs an opportunity to study the accusation against them, consult a union official/lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint.

Participation of Counsel

Q: Does the EEs counsel have the R to participate in the investigatory hearing?

Gonzales v Ateneo de Davao Univ: Ateneo Grade School Headmaster sent a letter

to Gonzales about the complaints of 2 parents for alleged use of corporal punishment on her students. Gonzales claimed that she was not informed of the identity of the yrs after the complaints were made that she discovered, through her students and their parents, that Ateneo had solicited complainants to lodge written complaints about her. She wrote a letter to the headmaster that she be formally informed of the An investigative committee was organized, but Gonzales refused to take part in parents, and that she was not confronted about it by Ateneo, and that it was only 2

complaint and be duly investigated.

the investigation unless the rules of procedure laid down by the Committee revised, contending that the same were violative of her R to due process. & recommendation of the Committee.

(specifically the provision prohibiting her counsel to participate in the proceedings) be Later, Ateneo served a Notice of Termination on Gonzales pursuant to the findings

RULING: Due process denied. Twin requirements missing. No ample opportunity, w/ assistance of counsel, she was not informed of the nature of her offense and she be based on established facts and on a sound legal foundation. did not get to cross examine and confront the witnesses against her. Decision must

Formal Hearing NOT Required

Gatus v Quality House: There is no violation of due process even if no formal or actual

hearing was conducted, provided a party is given a chance to explain his side.

Procedural Process NOT wiped away by Union Security Clause

Carino v NLRC: The company, upon being formally advised in writing of the expulsion

of Carino from the union, in turn simply issued a termination letter to him, effective The company should have satisfied itself by its own inquiry of the validity of his expulsion from the union.

the very next day, w/o giving him a chance to explain his side of the story. RULING:

Ferrer v NLRC: The union executed a closed-shop agreement w/ the company, and the company dismissed him outright by virtue of the CBA.

expelled the petitioner from the union, and recommended his dismissal to the mgt. RULING: While a closed-shop agreement is not illegal, eventhough providing for the

dismissal of EEs who have not maintained their membership in the union. However,

in the implementation of the provisions of the CBA, both parties thereto shld see to it that no R is violated or impaired. In this case the outright dismissal of Ferrer violated his R to due process of notice & hearing.
In terminating the ENT of an EE by enforcing the union security clause, the

1. The union security clause is APPLICABLE; the CBA;

ER needs only to determine & prove that:

2. The union is requesting for enforcement of the union security provisions in 3. There is sufficient evidence to support the unions decision to expel the EE from the union.

WHEN HEARING IS NOT REQUIRED findings of the mgt.

If the EE has ADMITTED his guilt; all that is needed is to INFORM the EE of the BUT, there must be a clear admission of guilt. If the EE merely narrated & explained what he did w/o admitting his guilt, then conducting a hearing is required.

If the termination is due to AUTHORIZED CAUSES Due Process in AUTHORIZED Causes: 2 Notices required but NOT a hearing

In ENT Terminations due to AUTHORIZED causes, INVESTIGATION & HEARING the DOLE.

is NOT REQUIRED. Only 1-month advance notices to BOTH the affected EE and

The EE may contest the reality or GF character of the termination ground by filing a complaint w/ the DOLE.

Notice must be INDIVIDUAL, not collective

Shoppers Gain Supermart v NLRC: The lease contract over the premises w/c the ER supermart was using was not renewed, hence the business had to close. 30 days before closing, the ER posted a notice of closure on the EEs bulletin board. RULING: Such posting of notice on the EEs bulletin board is not sufficient must notify HIM in writing at least 30 days in advance.

compliance. The law requires the ER who seeks to terminate the ENT of his EE


1. Voluntary Arbitration as Notice

Voluntary arbitration is SUBSTANTIAL COMPLIANCE w/ the 1-month mandatory whether the closure of the business is done in GF. , where there has been satisfied the intendment of the hearing required.

notice required under 283. The purpose is to enable proper authorities to ascertain voluntary arbitration, there is NO NEED FOR 1 MONTH NOTICE, as it more than

2. If the EE has CONSENTED to the retrenchment, or voluntarily applied for

retrenchment w/ his ER due to the installation of labor saving devices, redundancy, closure or cessation of oper, or to prevent financial losses to the business of the ER.


In termination causes, the burden of proof rests upon the ER to show that the Where the termination cases involve OFW recruited & deployed overseas, the burden is upon BOTH the FOREIGN-BASED ER & the ENT AGENCY or recruitment entity w/c recruited the worker (for the latter is not only the agent of the arising from the dismissal of the workers. dismissal is for a just and valid cause.

former, but is also solidarily liable w/ the foreign principal for any claims or liabilities Quantum of Evidence: SUBSTANTIAL EVIDENCE: it is sufficient that there is SOME BASIS for the EEs misconduct, or that the ER has REASONABLE GROUND TO renders him unworthy of the trust & confidence demanded by his position. BELIEVE that the EE is responsible for the misconduct and his participation therein

Substantial Evidence such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.


GR: The ER may by condonation/waiver of the EEs conduct (such as retention of the the R to discharge them for cause. He is deemed to have lost or waived his R to insist on the EEs acts as ground for dismissal.

EE after the ERs discovery of his act), preclude himself from subsequently asserting

: But subsequent misconduct of the EE gives the ER a right to take the entire record into account, the condoning is deemed to have been conditioned upon future good conduct.

: In case of a continuing breach of contract of ENT, there can be no waiver or : Even if the ER has paid the wages/salary of the EE to the time of his discharge does not amount to condonation. condonation that will prevent the ER from discharging the EE at any time.


The ER may place the worker concerned under preventive suspension if his or of his co-workers. o

continued ENT poses a serious & imminent threat to the life or property of the ER Invalid Preventive Suspension

Global Inc v Atienza - where the ER placed the EE on preventive

suspension for having violated company rules & regulations by incurring repeated absences & tardiness and subsequently dismissed her. Her of the ER. o tardiness/absences does not in any way pose serious threat to the property Valid Preventive Suspension

Globe-Mackay v NLRC & Salazar: Acting on reports that some of its

expensive equipment were missing, GM conducted an investigation of over the report that he formed a partnership w/ a supplier of GM.

Saldivar, the manager for tech operations support. He was also investigated RULING: The findings pointing to Saldivars acts in conflict w/ his position

as a tech operations manager, necessitated the immediate & decisive action on any EE closely associated w/ Saldivar. The suspension of Salazar was impelled by the discovery of the missing ac unit inside the apartment w/c company has adjudged the EE guilty of the charges she was asked to explain, was a valid measure resorted to for the protection of the

she shared w/ Saldivar. Such preventive susp, while not signifying that the

companys property pending investigation of the alleged misfeasance/malfeasance committed by the EE.
Period of Preventive Suspension

GR: Being only an alternative protective measure, cannot last longer than 30 DAYS. After that, the ER shall reinstate the worker in his former position or in a substantially former position, because suspension beyond this maximum period amounts to CONSTRUCTIVE DISMISSAL. equivalent position (general application). Hence, the EE must be reinstated to his

: The ER may extend the period of suspension, provided that during the period of

suspension, he pays the wages & other benefits due to the worker. In such case the worker shall NOT be bound to reimburse the amt paid to him during the extension if the ER decides, after completion of the hearing, to dismiss the worker.

: BUT for PROJECT & NON-PROJECT EES in the CONSTRUCTION industry, the preventive suspension cannot be longer than 15 DAYS. Beyond that, the EE is entitled to wages & benefits.

Constructive Dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefit & privileges. There may be constructive dismissal if an act of part of the EE that it could foreclose any choice by him except to forego his continued ENT. clear discrimination, insensibility or disdain by an ER becomes so unbearable on the


Even if the cause is valid, and due process was followed, still the dismissal may RULE is that: The penalty must be COMMENSURATE to the OFFENSE.

be questioned (& eventually nullified) if the penalty itself is NOT appropriate. The

Grave offenses deserve grave penalties, BUT diverse factors shld also be money involved. be avoided.

considered, like the EEs long yrs of otherwise satisfactory service, or the amt of

Dismissal is a harsh penalty. If at all avoidable, w/o oppressing the ER, it should

Value of Property as a factor in determining penalty

Gelmart Industries v NLRC: Felix has been an auto-mechanic for Gelmart for 16 years.

He was caught by security guards taking out 16 oz. of used motor oil w/o a gate

pass. Under the Rules of Gelmart, theft or pilferage merits outright termination from ENT. After investigation, he was found guilty and was dismissed. RULING: While the used motor oil still remains the property of Gelmart, and taking it out of the co premises w/o gate pass constitutes theft/pilferage of company property, however, a dismissal is too harsh. Considering Felixs 15 yrs of service w/o any previous derogatory record, and considering that the value of the prop pilfered is very minimal, plus the fact that Gelmart failed to reasonably establish that nondismissal of Felix would work undue prejudice to the validity of their operation or is inimical to the companys interest, suspension and not dismissal is the more appropriate penalty.

Q: May past offenses of an EE be tacked on to the latest offense to justify the penalty A: Such previous offenses may be so used as valid justification for dismissal from work only IF the infractions are RELATED to the subsequent offense upon w/c basis the termination of ENT is decreed. of dismissal?


WHERE: Regional Branch of DOLE (Branch comprising the workplace) WHEN: Complaint should be filed w/in 4 YEARS from dismissal CLEARANCE NO LONGER REQUIRED

The clearance requirement provided by Art 278(b) (no ER may shut down is

establishment or dismiss or terminate the ENT of EEs w/ at least 1 yr of service

during the last 2 yrs, whether such service is continuous or broken, w/o prior written authority issued in accordance w/ the RR the Sec may promulgate) is ABOLISHED by BP 130.

CONSEQUENCES OF TERMINATION SEPARATION PAY OLD LAW: The ER may dismiss an EE with or without just cause. And only when there is NO just cause was the ER required to a) serve the 1-month advance NOTICE on the EE, OR

It was only the FAILURE to serve such notice that would render the ER for AND, even if the dismissal was found to be w/o just cause, w/o due notice and abusive on the part of the ER, the latter could only be liable for separation pay & moral damages, BUT the dismissed EE could NOT demand REINSTATEMENT. PRESENT LAW: Requires a VALID REASON to terminate an ENT (no valid reason = no termination). GR: Continuance on the job. separation pay (not the fact that the ENT was severed w/o just cause).

b) pay month salary for every yr of service, (whichever is longer).

: Payment of separation pay in lieu of the job.

1. As ERs STATUTORY OBLIG in cases of legal termination due to AUTHORIZED CAUSES (283 or 284); Because those causes are not faults of the EE but exigencies of the business disease, it is only fair in the context of social justice Varies accdg to the cause of termination

4 WAYS/ CONTEXTS of Separation Pay

a) Because of introduction of labor-saving DEVICE or of REDUNDANCY, the separation pay is the higher amount of:

ii. 1-month pay for every yr of service (a fraction of at least 6 b) Because of RETRENCHMENT or closure/CESSATION of oper NOT due to serious business losses or EEs DISEASE, whichever is higher of: ii. month pay for every yr of service (a fraction of at least 6 c) If the closure/CESSATION of business is due to serious business months considered as 1 yr) i. 1-month pay, or months considered as 1 yr)

i. 1-month pay or

The salary base used in computing the separation pay should INCLUDE not just the basic salary, but also the regular allowances that an EE has been receiving but commissions may not be included or travels equivalent.

LOSSES or financial reverses NO separation pay need be paid.

2. As FINANCIAL ASSISTANCE, as an act of social justice, even in cases of legal dismissal under 282; This serves as an exception, when an EE who commits any of the acts enumerated in Art 282 (just causes), making his termination legal (ordinarily the ER need not pay him separation pay). This is paid if the not reflect of the EEs moral character. -

act committed by the EE does not amount to serious misconduct or does It is NOT statutory requirement, but rather one out of compassion.

PLDT v NLRC & Abucay: Ms. Abucay, a traffic operator of PLDT, was

accused by 2 complainants of having received money from them in

exchange of her promise to facilitate approval of their applications for

telephone installation. Investigated & heard, she was found guilty and was dismissed. The LA found her dismissal as valid but nevertheless required PLDT to give her 1-months pay for every year of her 10years of service

as financial assistance. Affirmed by the NLRC, it further said that the EE is sufficiently punished for her dismissal. The grant of financial assistance is not intended as a reward for her offense, but merely to help her for the loss of ENT after working faithfully for PLDT for 10yrs.

Financial assistance based on compassionate justice was granted even to by the company retirement plan.

an EE who was not dismissed but who had to RETIRE w/o being covered

Exceptions to Financial Assistance 1) Serious misconduct

2) Offense reflecting on his moral character 3) Fraud or willful breach of trust 4) Willful disobedience

5) Gross & habitual neglect of duties

6) Commission of a crime/offense against the person of the ER or any Labor court may grant separation pay for analogous causes anchored on social justice Separation pay is denied an admin mgr who was dismissed after almost 3 yrs of service for arrogant, uncompromising and hostile BUT when there is doubt that dishonesty was committed, financial behavior toward the ER (Tirazona v PET) immediate member of his family or his authorized rep

assistance may still be awarded to an EE who has rendered long yrs of

The court, in the interest of substantial justice, may revoke an award of financial Amount of Financial Assistance is by judicial determination based on the 3. In LIEU of REINSTATEMENT in illegal dismissal cases where the EE is ordered 4. As and ENT benefit granted in a CBA or company policy. reinstated but reinstatement is NOT feasible; circumstances of each case. assistance by the LA/NLRC, even if the ER did not question such grant.

service based on the liberal construction of labor laws in favor of the worker.

Does not arise from legal or illegal dismissal but from nonadversarial mode of leaving ones ENT, such as RESIGNATION. The benefits demandability depends on the terms of the a. CBA

b. Voluntary company policy BUT even if not granted by a company policy or practice, resignation pay may still be awarded for equitable reason. c. Established practice


An illegally dismissed EE is entitled to either: a. Reinstatement + Backwages; or b. Separation pay + Backwages (if reinstatement is no longer possible).[computed from the time of dismissal up to retirement age of 60].

Backwages presupposes illegal termination. It is restitution of earnings unduly withheld While generally an order of reinstatement carries w/ it an award of backwages, the court may not only mitigate, but also absolve the ER from liability for backwages where GF is evident. SEPARATION PAY Granted where reinstatement is no longer advisable because of strained relations bet EE & ER Basis of Computation: from the EE because of illegal termination.

BACKWAGES Represent compensation that should be unjust dismissal. earned but not collected because of the

Usually, the length of EEs service

(separation pay in lieu of reinstatement) Designed to provide the EE w/ the looking for another job. wherewithal during the period that he is

The actual period when he was

unlawfully prevented from working Designed to redress the injury (loss of dismissed EE during the period bet dismissal & reinstatement. earnings that would have accrued to the

Oriented towards the immediate future, must undergo before locating a replacement job.

the transitional period the dismissed EE

It is a form of relief that restores the income that was lost by reason of unlawful dismissal.

They are DISTINCT & SEPARATE, and one cannot be deducted from the other. UNPAID SALARY Refer to those earned PRIOR to dismissal Ordered if there are still salaries BACKWAGES Refer to those earnings lost AFTER and because of dismissal. Usually ordered w/ reinstatement

collectible by the EE form the ER by reason of services already rendered

GR: As a substantive and statutory R, backwages may be granted by the court to an : Except where the lower courts erroneous omission of the grant of backwages w/ a finding of illegal dismissal has become final & executory on the failure of the complainant to appeal the said decision. BUT in illegally dismissed EE even if he fails to claim it.

St. Michaels Institute v Santos: The fact that the NLRC did not award backwages to

the EEs, or that they themselves did not appeal the NLRC decision does not bar the CA from awarding backwages. The award of backwages is a mere logical consequence of the finding that the EEs were illegally dismissed.

Basis of Computation of Backwages

An UNQUALIFIED award of backwages means that the EE is paid at a WAGE The base figure to be used in the computation of backwages shld include not just the basic salary, but also the regular allowances that the EE had been receiving such as the ECOLA and the 13th MP mandated under the law. RATE at the TIME of his dismissal.

Backwages shld be computed from the time of the illegal dismissal w/c is also the

time the EEs salary started to be withheld, up to the time of his actual reinstatement.

OLD RULE: The award of backwages to an EE could be reduced by subtracting the wages w/c he could have earned had he been diligent enough to find a job.

wages actually earned by him from ENT during the period of his separation, or the The ER would be allowed to adduce evidence on these matters and

consequently cause suspension of execution of judgment. This not only reduced the awarded backwages but also delayed its payment.

MERCURY DRUG RULE: Mercury Drug v CIR: The SC, in the interest of justice &

expediency, adopted the policy of granting backwages for a maximum period or 3 years w/o qualification & deduction.

RA 6715: (March 21, 1989): entitled an illegally dismissed EE to FULL backwages for illegal dismissals that occurred after March 21, 1989. Bustamante v NLRC & Evergreen. Backwages to be awarded to an illegally

dismissed EE shld NOT as a GR, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal.


2 Requisites for the effects of extraordinary inflation to apply:

1. Agreement bet the parties; and

2. Official declaration thereof by competent authorities. If there is a legal & valid dismissal (for a valid reason), but ER does not observe procedural due process ER must pay indemnity (penalty), the amount of w/c ER.The Wenphil Doctrine. depends on the facts of each case and the gravity of the omission committed by the Damage w/c an ER shld pay if he violates an EEs R to procedural due process prior to his dismissal for cause is in the nature of nominal damages (the purpose is not to penalize the ER but to vindicate or recognize the R of the Ee.

Termination Legal but due process is not followed:

Wenphil Doctrine: Termination is still valid, but ER must pay INDEMNITY. indemnity to FULL BACKWAGES. invalid)

Serrano Ruling: Termination is still valid, but the Court raised the sanction from Viernes Ruling: Not only INDEMNITY + FULL BACKWAGES (The termination here is Agabon (present) : Termination is still valid, the EE remains dismissed, but the ER full backwages.

must pay an indemnity HEAVIER than that imposed in Wenphil but LIGHTER than

JAKA ruling: refined Agabon. Whereas Agabons award of nominal damages does not distinguish whether an EEs dismissal is based either on just or on authorized causes, JAKA makes a distinction. 1. Dismissal based on JUST causes w/o due process the sanction to be effect, initiated by an act imputable to the EE;

imposed upon him shld be tempered. Because the dismissal process was, in

2. Dismissal based on AUTHORIZED causes w/o due process the sanction his mgt prerogative.

must be stiffer, because the dismissal was initiated by the ERs exercise of

Industrial Timber Ruling: refines further JAKA: subdivided the authorized causes: 2. Not due to losses. penalty is stiffer.

1. Due to losses penalty to the ER who disregarded due process is lighter

Agabon v NLRC, Reviera Home Improvements: Complaining EEs were cornice

installers of a company whose business was selling & installing of ornamental

construction materials. The were dismissed because they refused to work on pakyaw basis. In their complaint they asserted having been dismissed w/o notice & hearing. The ER, on the other hand, maintained that they were not dismissed, but that they abandoned their work. They refused to work on a new assignment of cornice installation, and instead they sub-contracted installation work for another company. CA: There was abandonment because they were already working for another ER. SC: There are 4 possible situations of dismissal: 1. Dismissal for a just cause (282), or authorized cause (283), or for health reasons (284), AND due process was observed

2. Dismissal without just or authorized cause BUT due process was observed

Dismissal is valid and ER will not suffer any liability

Dismissal is illegal; EE entitled to reinstatement w/o loss of seniority Rs and other privileges and full backwages inclusive of allowances & other benefits or their monetary equivalent computed from the time the compensation was not paid up tho the time of actual reinstatement. Same as #2

3. Dismissal without just/authorized cause AND no due process.


4. Dismissal is for just/authorized cause BUT no due process. procedural requirements of due process.

Dismissal shld be upheld, but the ER is liable for non-compliance w/ the

abandonment on the part of the EEs. The ER however, did not follow the notice requirements. Where the dismissal is for a just cause, the lack of due process should not nullify the dismissal, or render it illegal, or ineffectual. However, ER

In the present case, the dismissal should be upheld because there was

should indemnify the EE for the violation of his statutory Rs. The indemnity to be imposed shld be stiffer to discourage the abhorrent practice of dismiss now, pay later. The sanction should be in the nature of indemnification or penalty & shld the due process violation. It should be in the form of nominal damages. In this case, it is P30k. depend on the facts of each case, taking into special consideration the gravity of

Industrial Timber v Ababan: mentioned some other factors to consider in assessing the

penalty to the ER:

1. The authorized cause invoked, whether it was retrenchment, or a 2. The number of EEs to be awarded; closure/cessation of operation due to losses or otherwise;

3. The capacity of the ERs to satisfy the awards, taking into account their 4. The ERs grant of other termination benefits in favor of the EEs 5. Whether there was a bona fide attempt to comply w/ the notice requirements as opposed to giving no notice at all. prevailing financial status as borne by the records;