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Grounds for filing an illegal dismissal case

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BY THE MANILA TIMES ON SEPTEMBER 1, 2013DEARPAO
Twitter
Dear PAO,
I was terminated from my work as a service crew in a fastfood joint. In one of our conversations, my
supervisor told me that the company simply had “to let me go.” Is it possible for me to file a case for illegal
dismissal?
Tito

Dear Tito,
Private employers are not prohibited from terminating the employment contract of their employees. In the
same manner, employees are also allowed to terminate their contracts with the company they are working
with. However, it should be emphasized that there must be a legal basis for the termination of such contract
and the same must be done in a lawful manner.

In your situation, we do not discount the fact that your employer has the right to terminate your employment.
But such right is not without limitation. As we have already mentioned, it is necessary that there must be a
legal basis for such termination, that is, it should be based on one of the grounds for termination as stated in
your employment contract or in the company policy.

If the employment contract or the company policy does not provide for said grounds, your termination must
be anchored on any of the just or authorized causes stated under the Labor Code. As can be gleaned under
Article 282 of the said code, the following are considered as just causes for termination: (a) Serious
misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in
connection with his work; (b) Gross and habitual neglect of duty by the employee of his duties; (c) Fraud or
willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing.
On the other hand, the following are considered as authorized causes for termination: (1) Installation of
labor-saving devices; (2) Redundancy; (3) Retrenchment to prevent losses; (4) Closing or cessation of
business; and (5) Disease of the employee whose continued employment is prohibited by law or is prejudicial
to his health as well as the health of his employees (Articles 283 and 284, Labor Code).

In addition, your company should have given you proper notice prior to your termination. If your termination
is based on a just cause, they should have given you a written notice informing you of the ground for your
dismissal as well as a subsequent notice informing you of their final decision to terminate your employment.
If the termination is based on any of the grounds set under Article 283 of the Labor Code, they should have
served you and the Department of Labor and Employment (DOLE) with a written notice at least one month
before the intended date of such termination.

If your termination is not consistent with the above-stated rules, it may be said that your termination is not
lawful. Consequently, you may file a complaint for illegal dismissal before the National Labor Relations
Commission (NLRC).

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the
facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed
or elaborated.
Philippine Labor Laws
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The two most commonly used grounds for termination of employee are the Authorized Causes
under Article 283 and 284 of the Labor Code, and the Just Causes under Article 282. Below are the
authorized causes for termination of employment.
Definition
As maybe broadly defined, authorized causes for dismissal of employee refer to those lawful grounds for
termination which in general do not arise from fault or negligence of the employee. “Authorized causes”
are distinguished from “just causes” under Article 282 in that the latter are always based on acts
attributable to the employee’s own fault or negligence.
Authorized causes
The authorized causes for termination of employee are enumerated under Article 283 and 284 of the
Labor Code, as follows:
1. Installation of labor-saving devices. The installation of labor-saving devices contemplates the
installation of machinery to effect economy and efficiency in the method of production [1].
2. Redundancy. Redundancy exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise. A position is redundant where it
superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as
over hiring of workers, decreased of volume business, or dropping of a particular product line or service
activity previously manufactured or undertaken by the enterprise [2].
3. Retrenchment to prevent losses. Retrenchment is an economic ground to reduce the number of
employees. Retrenchment is the reduction of personnel for the purpose of cutting down on costs of
operations in terms of salaries and wages resorted to by an employer because of losses in operation of a
business occasioned by lack of work and considerable reduction in the volume of business [3]. It is
sometimes also referred to as downsizing. It is aimed at saving a financially ailing business establishment
from eventually collapsing.
4. Closure or cessation of operation. The closure of a business establishment is a ground for the
termination of the services of an employee unless the closing is for the purpose of circumventing
pertinent provisions of the Labor Code.
5. Disease. An employer may terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his
health as well as the health of his co-employees.
It should be noted though that the above enumeration is not an exhaustive list of authorized causes of
termination of employment. Valid application of union security clause, relocation of business, among
others, may also considered authorized causes of termination.
JAN

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Redundancy
Employee Discipline and Termination 2010-01-24
Redundancy Concept
Redundancy is one of the authorized causes for termination of employment under Article 283 of the Labor
Code of the Philippines.
Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the
actual requirements of the enterprise. A position is redundant where it superfluous, and superfluity of a
position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased of
volume business, or dropping of a particular product line or service activity previously manufactured or
undertaken by the enterprise.
In Wiltshire, the Court held that an employer has no legal obligation to keep on the payroll employees more
than the number needed for the operation of the business. (See Wiltshire File Co., v. NLRC, 1991; Coats Manila
Bay vs. Ortega, 2009)
Adequate Proof of Redundancy
It is the employer’s burden to show that redundancy exists. It is not enough for a company to merely declare
that it has become overmanned. It must produce adequate proof of such redundancy to justify the dismissal of
the affected employees (Asufrin vs. San Miguel Corporation, 2004).
Evidence must be presented to substantiate redundancy such as but not limited to the new staffing pattern,
feasibility studies/proposal, on the viability of the newly created positions, job description and the approval
by the management of the restructuring (Panlilio vs. NLRC, 1997).
Requirements of a Valid Redundancy Program
The employer must comply with the following requisites to ensure the validity of the implementation of a
redundancy program:
1. A written notice served on both the employees and the Department of Labor and Employment
(DOLE) at least one month prior to the intended date of retrenchment as required by the Labor Code;
2. Payment of separation pay equivalent to at least one month pay or at least one month pay for every
year of service, whichever is higher;
3. Good faith in abolishing the redundant positions; and
4. Fair and reasonable criteria in ascertaining what positions are to be declared redundant and
accordingly abolished. (See Caltex vs. NLRC, 2007, )
Separation Pay
In case of termination due to redundancy, the worker affected thereby shall be entitled to a separation pay
equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service, whichever
is higher.
Proof of Losses Not Required
Redundancy does not require the exhibition of proof of losses or imminent losses. In fact, of all the statutory
grounds provided in Article 283 of the Labor Code, it is only retrenchment which requires proof of losses or
possible losses as justification for termination of employment. (See Coats Manila Bay case.)
Duplication of Work Not Necessary.
Redundancy does not necessarily refer to duplication of work. That no other person was holding the same
position prior to the termination of the employee’s services does not mean that his position had not become
redundant. Indeed, in any well-organized business enterprise, it would be surprising to find duplication of
work and two or more people doing the work of one person. (See Wiltshire case.)
In redundancy, what is looked into is the position itself, the nature of the services performed by the employee
and the necessity of such position. (Tierra International Construction Corp. vs. NLRC, 1992)
Redundancy Arising from Contracting Out of Labor
In several cases, the court upheld the dismissal on ground of redundancy even when the employer contracts
out the services of another company to perform the same task as the redundant positions. Contracting out of
labor has been held as a valid management prerogative. (See De Ocampo vs. NLRC, 1992; Serrano vs. NLRC,
2000.)
Cases
1. The employer was engaged in the production of wooden doors and furniture. The complainants who
were hired as mechanics were terminated by the employer when their positions were abolished, and
contracted out to Gemac Machineries. The dismissal is proper. In contracting the services of Gemac, which the
company has the right to do, the services rendered by the mechanics became redundant and superfluous, and
therefore properly terminable. (De Ocampo vs. NLRC, G.R. No. 101539 September 4, 1992.)
2. As a result of the phasing-out of the company’s security section, and contracting out the same with an
independent contractor, the services of the complainant as head of the security checker’s section, was
terminated. The termination was for an authorized cause, i.e., redundancy. (Serrano vs. NLRC, G.R. No.
117040. January 27, 2000.)

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