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What is the constitutional provision on protection to labor?
“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 on investments, and to
expansion and growth.”
What rules govern the proceedings before the Labor
Arbiters and the NLRC?
The proceedings before the Labor Arbiters and the NLRC are
governed by the Labor Code, as amended, the 2011 NLRC
Rules of Procedure, and suppletorily, the Rules of Court.
What is the nature of the proceedings before the Labor
Arbiter?
The NLRC Rules describe the proceedings before the Labor
Arbiter as non-litigious. Subject to the requirements of due
process, the technicalities of law and procedure in the regular
courts do not apply in the labor arbitration proceedings.
What are the cases falling under the jurisdiction of the Labor
Arbiters?
Under Article 217 of the Labor Code, Labor Arbiters have
jurisdiction over the following cases:
1. Unfair labor practice (ULP) cases;
2. Termination disputes (or illegal dismissal cases);
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of the Labor
Code, including questions involving the legality of strikes and
lockouts;
6. Except claims for employees compensation not included
in the next succeeding paragraph, social security, medicare
and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount
exceeding Five Thousand Pesos (P5,000.00), whether or not
accompanied with a claim for reinstatement;
7. Wage distortion disputes in unorganized establishments
not voluntarily settled by the parties pursuant to Republic Act
No. 6627;
8. Enforcement of compromise agreements when there is
non-compliance by any of the parties pursuant to Article 227
of the Labor Code, as amended;
9. Money claims arising out of employer-employee
relationship or by virtue of any law or contract, involving
Filipino workers for overseas employment, including claims
for actual, moral, exemplary and other forms of damages as
provided by Section 10 of R.A. No. 8042, as amended by R.A.
No. 10022;
10.Contested cases under the exception clause of Article
128(b) of the Labor Code, as amended by R.A. 7730; and
11.Other cases as may be provided by law.
May a non-lawyer appear in any of the proceedings before
the Labor Arbiter or Commission?
Yes. A non-lawyer may appear in any of the proceedings
before the Labor Arbiter or Commission only under the
following conditions:
1. he/she represents himself/herself as party to the case;
2. he/she represents a legitimate labor organization, as
defined under Article 212 and 242 of the Labor Code, as
amended, which is a party to the case: Provided, that he/she
presents to the Commission or Labor Arbiter during the
mandatory conference or initial hearing: (i) a certification
from the Bureau of Labor Relations (BLR) or Regional Office of
the Department of Labor and Employment attesting that the
organization he/she represents is duly registered and listed in
the roster of legitimate labor organizations; (ii) a verified
certification issued by the secretary and attested to by the
president of the said organization stating that he/she is
authorized to represent the said organization in the said case;
and (iii) a copy of the resolution of the board of directors of
the said organization granting him such authority;
3. he/she represents a member or members of a legitimate
labor organization that is existing within the employer’s
establishment, who are parties to the case: Provided, that
he/she presents: (i) a verified certification attesting that
he/she is authorized by such member or members to
represent them in the case; and (ii) a verified certification
issued by the secretary and attested to by the president of
the said organization stating that the person or persons
he/she is representing are members of their organization
which is existing in the employer’s establishment;
4. he/she is a duly-accredited member of any legal aid office
recognized by the Department of Justice or Integrated Bar of
the Philippines: Provided, that he/she (i) presents proof of
his/her accreditation; and (ii) represents a party to the case;
5. he/she is the owner or president of a corporation or
establishment which is a party to the case: Provided, that
he/she presents: (i) a verified certification attesting that
he/she is authorized to represent said corporation or
establishment; and (ii) a copy of the resolution of the board
of directors of said corporation, or other similar resolution or

instrument issued by said establishment, granting him/her
such authority.
Does the counsel or authorized representatives have the
authority to bind their clients?
Yes. Counsel or other authorized representatives of parties
shall have authority to bind their clients in all matter of
procedure. However, they cannot, without a special power of
attorney or express consent, enter into a compromise
agreement with the opposing party in full or partial discharge
of a client’s claim.
What is the purpose of mandatory conciliation and
mediation conference?
The mandatory conciliation and mediation conference shall
be called for the purpose of (1) amicably settling the case
upon a fair compromise; (2) determining the real parties in
interest; (3) determining the necessity of amending the
complaint and including all causes of action; (4) defining and
simplifying the issues in the case; (5) entering into admissions
or stipulations of facts; and (6) threshing out all other
preliminary matters.
What is the effect of non-appearance of the parties in the
mandatory conciliation and mediation conference?
The non-appearance of the complainant or petitioner during
the two (2) settings for mandatory conciliation and mediation
conference scheduled in the summons, despite due notice
thereof, shall be a ground for the dismissal of the case
without prejudice.
In case of non-appearance by the respondent during the first
scheduled conference, the second conference as scheduled in
the summons shall proceed. If the respondent still fails to
appear at the second conference despite being duly served
with summons, he/she shall be considered to have waived
his/her right to file position paper. The Labor Arbiter shall
immediately terminate the mandatory conciliation and
mediation conference and direct the complainant or
petitioner to file a verified position paper and submit
evidence in support of his/her causes of action and
thereupon render his/her decision on the basis of the
evidence on record.
What is the role of the Labor Arbiter in hearing and
clarificatory conference?
The Labor Arbiter shall take full control and personally
conduct the hearing or clarificatory conference and may ask
questions for the purpose of clarifying points of law or facts
involved in the case. The Labor Arbiter may allow the
presentation of testimonial evidence with right of cross-
examination by the opposing party and shall limit the
presentation of evidence to matters relevant to the issue
before him/her and necessary for a just and speedy
disposition of the case.
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The Labor Arbiter shall make a written summary of the
proceedings, including the substance of the evidence
presented, in consultation with the parties. The written
summary shall be signed by the parties and shall form part of
the records.
What is the period within which to conduct clarificatory
conference?
The parties and their counsels appearing before the Labor
Arbiter shall be prepared for continuous hearing or
clarificatory conference. No postponement or continuance
shall be allowed by the Labor Arbiter, except upon
meritorious grounds and subject to the requirement of
expeditious disposition of cases. The hearing or clarificatory
conference shall be terminated within thirty (30) calendar
days from the date of the initial clarificatory conference. In
cases involving overseas Filipino workers, the aggregate
period for conducting the mandatory conciliation and
mediation conference, including hearing on the merits or
clarificatory conference, shall not exceed sixty (60) days,
which will be reckoned from the date of acquisition of
jurisdiction by the Labor Arbiter over the person of the
respondents.
What is the effect of non-appearance of the parties during
clarificatory conference?
In case of non-appearance of any of the parties during the
hearing or clarificatory conference despite due notice,
proceedings shall be conducted ex parte. Thereafter, the case
shall be deemed submitted for decision.
What is the period within which to file a motion for
postponement?
No motion for postponement shall be entertained except on
meritorious grounds and when filed at least three (3) days
before the scheduled hearing.
What is the period within which to cause an amendment of
the complaint or petition?
No amendment of the complaint or petition shall be allowed
after the filing of position papers, unless with leave of the
Labor Arbiter.
What are the prohibited pleadings and motions?
The following pleadings and motions shall not be allowed and
acted upon nor elevated to the Commission: (a) Motion to
dismiss the complaint except on the ground of lack of
jurisdiction over the subject matter, improper venue, res
judicata, prescription and forum shopping; (b) Motion for a
bill of particulars; (c) Motion for new trial; (d) Petition for
Relief from Judgment; (e) Motion to declare respondent in
default; (f) Motion for reconsideration of any decision or any
order of the Labor Arbiter; (g) Appeal from any interlocutory
order of the Labor Arbiter, such as but not limited to, an
order: denying a motion to dismiss, denying a motion to
inhibit; denying a motion for issuance of writ of execution, or
denying a motion to quash writ of execution; (h) Appeal from

the issuance of a certificate of finality of decision by the Labor
Arbiter; (i) Appeal from orders issued by the Labor Arbiter in
the course of execution proceedings; and (j) Such other
pleadings, motions and petitions of similar nature intended to
circumvent above provisions.
May the Commission blacklist bonding companies?
Yes. The Commission through the Chairman may on
justifiable grounds blacklist a bonding company,
notwithstanding its accreditation by the Supreme Court.
Upon verification by the Commission that the bond is
irregular or not genuine, the Commission shall cause the
immediate dismissal of the appeal, and censure the
responsible parties and their counsels, or subject them to
reasonable fine or penalty, and the bonding company may be
blacklisted.
May a party file a motion to revive and re-open a case
dismissed without prejudice?
Yes. A party may file a motion to revive or re-open a case
dismissed without prejudice, within ten (10) calendar days
from receipt of notice of the order dismissing the same;
otherwise, the only remedy shall be to re-file the case. A
party declared to have waived his/her right to file position
paper may, at any time after notice thereof and before the
case is submitted for decision, file a motion under oath to set
aside the order of waiver upon proper showing that his/her
failure to appear was due to justifiable and meritorious
grounds.
What is the effect of rehabilitation receivership on
monetary claims of workers?
Rehabilitation receivership of a company has the effect of
suspending all proceedings – at whatever stage it may be
found - in all judicial or quasi-judicial bodies. The NLRC may
not proceed with hearing of monetary claims. If already
decided, the monetary awards cannot be executed. If due for
execution, no such execution may be had. Only when there is
liquidation that the monetary claims may be asserted. The
suspension of the proceedings is necessary to enable the
rehabilitation receiver to effectively exercise its powers free
from any judicial or extra-judicial interference that might
unduly hinder the rescue of the distressed company. Once
the receivership proceedings have ceased and the
receiver/liquidator is given the imprimatur to proceed with
corporate liquidation, the SEC order becomes functus officio.
Thus, there is no legal impediment for the execution of the
decision of the Labor Arbiter for the payment of separation
pay by presenting it with the rehabilitation receiver and
liquidator, subject to the rules on preference of credits.
What are the two kinds of jurisdiction of the NLRC?
The National Labor Relations Commission exercises two (2)
kinds of jurisdiction: (1) Original jurisdiction; and (2) Exclusive
appellate jurisdiction.
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1. Original jurisdiction:
Injunction in ordinary labor disputes to enjoin or restrain any
actual or threatened commission of any or all prohibited or
unlawful acts or to require the performance of a particular
act in any labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any
party;
Injunction in strikes or lockouts under Article 264 of the Labor
Code; and
Certified labor disputes causing or likely to cause a strike or
lockout in an industry indispensable to the national interest,
certified to it by the Secretary of Labor and Employment for
compulsory arbitration.
2. Exclusive appellate jurisdiction:
All cases decided by the Labor Arbiters including contempt
cases; and
Cases decided by the DOLE Regional Directors or his duly
authorized Hearing Officers (under Article 129) involving
recovery of wages, simple money claims and other benefits
not exceeding P5,000 and not accompanied by claim for
reinstatement.
What is the power to assume jurisdiction or certify “national
interest” labor disputes to NLRC?
When, in his opinion, there exists a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable
to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and
decide it or certify the same to the Commission for
compulsory arbitration.
In case of conflict, who has jurisdiction over termination
disputes, Labor Arbiter or Voluntary Arbitrator?
Jurisdiction over termination disputes belongs to Labor
Arbiters and not with the grievance machinery or Voluntary
Arbitrator. Under Article 262, the Voluntary Arbitrator may
assume jurisdiction only when agreed upon by the parties.
Policy Instructions No. 56 issued by DOLE Secretary Confesor
clarifying the jurisdiction of Labor Arbiters and Voluntary
Arbitrations does not apply. It reiterated the ruling that
dismissal is not a grievable issue.
What is the mode of appeal from the decision of the Labor
Arbiters?
Appeal from the decision of the Labor Arbiter is brought by
ordinary appeal to the NLRC within ten (10) calendar days
from receipt by the party of the decision. From the decision
of the NLRC, there is no appeal. The only way to elevate the
case to the Court of Appeals is by way of the special civil
action of certiorari under Rule 65 of the Rules of Civil
Procedure. From the ruling of the Court of the Appeals, it may
be elevated to the Supreme Court by way of ordinary appeal
under Rule 45 of the Rules of Civil Procedure.

What are the grounds for appeal?
There are four (4) grounds, to wit:
(a) If there is prima facie evidence of abuse of discretion on
the part of the Labor Arbiter;
(b) If the decision, order or award was secured through fraud
or coercion, including graft and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the findings of facts are raised which
would cause grave or irreparable damage or injury to the
appellant.
What are the requisites for perfection of appeal?
The appeal shall be: (1) filed within the reglementary period
provided in Section 1 of the Rule; (2) verified by the appellant
himself/herself in accordance with Section 4, Rule 7 of the
Rules of Court, as amended; (3) in the form of a
memorandum of appeal which shall state the grounds relied
upon and the arguments in support thereof, the relief prayed
for, and with a statement of the date the appellant received
the appealed decision, award or order; (4) in three (3) legibly
typewritten or printed copies; and (5) accompanied by proof
of payment of the required appeal fee and legal research fee,
posting of a cash or surety bond as provided in Section 6 of
this Rule, and proof of service upon the other parties.
What is the reinstatement aspect of the Labor Arbiter’s
decision?
If reinstatement is ordered by the Labor Arbiter in an illegal
dismissal case, it is immediately executory even pending
appeal. Such award does not require a writ of execution.
Is posting a bond stay the execution of immediate
reinstatement?
No. The posting of a bond by the employer does not have the
effect of staying the execution of the reinstatement aspect of
the decision of the Labor Arbiter.
Can the Labor Arbiter issue a partial writ pending appeal?
Yes. In case the decision includes an order of reinstatement
and the employer disobeys it or refuses to reinstate the
dismissed employee, the Labor Arbiter should immediately
issue a writ of execution, even pending appeal, directing the
employer to immediately reinstate the dismissed employee
either physically or in the payroll, and to pay the accrued
salaries as a consequence of such reinstatement at the rate
specified in the decision. The Sheriff should serve the writ of
execution upon the employer or any other person required
by law to obey the same. If he disobeys the writ, such
employer or person may be cited for contempt. While the
perfection of appeal will stay the execution of the decision of
a Labor Arbiter, the partial execution for reinstatement
pending appeal is not affected by such perfection.
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Is the award of reinstatement pending appeal by the Labor
Arbiter self-executory?
Yes. An award or order of reinstatement is self-executory
and, therefore, does not require a writ of execution to
implement and enforce it. To require the application for and
issuance of a writ of execution as pre-requisite for the
execution of a reinstatement award would certainly betray
and run counter to the very object and intent of Article 223,
i.e., the immediate execution of a reinstatement order. The
reason is simple. An application for a writ of execution and its
issuance could be delayed for numerous reasons. A mere
continuance or postponement of a scheduled hearing, for
instance, or an inaction on the part of the Labor Arbiter or
the NLRC, could easily delay the issuance of the writ thereby
setting at naught the strict mandate and noble purpose
envisioned by Article 223.
What is the period within which to conduct pre-execution
conference?
Within two (2) working days from receipt of a motion for the
issuance of a writ of execution which shall be accompanied by
a computation of a judgment award, if necessary, the
Commission or the Labor Arbiter may schedule a pre-
execution conference to thresh out matters relevant to
execution including the final computation of monetary
award. The pre-execution conference shall not exceed fifteen
(15) calendar days from the initial schedule, unless the parties
agreed to an extension. Any order issued by the Labor Arbiter
in the pre-execution conference is not appealable, subject to
the remedies available under Rule XII (Extraordinary
Remedies).
Is writ of execution necessary in case reinstatement is
ordered by the NLRC on appeal?
Yes. While it is now well-settled that a writ of execution is not
necessary to implement the reinstatement order issued by a
Labor Arbiter upon a finding of illegality of dismissal since it is
self-executory, however, if the reinstatement order is issued
by the NLRC on appeal, there is a need to secure a writ of
execution from the Labor Arbiter a quo to enforce the
reinstatement of the employee.
What is the lifetime or effectivity of the writ of execution?
Five (5) years. In case of partial satisfaction of judgment
during the lifetime of the writ, the Labor Arbiter shall motu
proprio issue an updated writ reflecting the amount collected
and the remaining balance.
What is the effect of refusal of the bonding company or
bank holding the cash deposit of the losing party to release
the garnished amount?
If the bonding company refuses to pay or the bank holding
the cash deposit of the losing party refuses to release the
garnished amount despite the order or pertinent processes
issued by the Labor Arbiter or the Commission, the president
or the responsible officers or authorized representatives of
the said bonding company or the bank who resisted or

caused the non-compliance shall be either cited for
contempt, or held liable for resistance and disobedience to a
person in authority or the agents of such person as provided
under the pertinent provision of the Revised Penal Code. This
rule shall likewise apply to any person or party who
unlawfully resists or refuses to comply with the break open
order issued by the Labor Arbiter or the Commission.
What is the power of the DOLE Secretary to assume
jurisdiction over a labor dispute or certify it to the NLRC for
compulsory arbitration?
The DOLE Secretary may assume jurisdiction over a labor
dispute, or certify it to the NLRC for compulsory arbitration,
if, in his opinion, it may cause or likely to cause a strike or
lockout in an industry indispensable to the national interest.
The President may also exercise the power to assume
jurisdiction over a labor dispute.
What is the effect of such assumption or certification of
labor dispute to the NLRC?
The following are the effects: (a) on intended or impending
strike or lockout– automatically enjoined even if a Motion for
Reconsideration is filed; (b) on actual strike or lockout–
strikers or locked out employees should immediately return
to work and employer should readmit them back; and (c) on
cases filed or may be filed – all shall be subsumed/absorbed
by the assumed or certified case except when the order
specified otherwise. The parties to the case should inform the
DOLE Secretary of pendency thereof.
May an injunction be issued in strike or lockout cases?
As a general rule, strikes and lockouts validly declared, enjoy
the protection of law and cannot be enjoined unless illegal
acts are committed or threatened to be committed in the
course of such strikes or lockouts. Ordinarily, the law vests in
the NLRC the authority to issue injunctions to restrain the
commission of illegal acts during the strikes and pickets. This
policy applies even if the strike appears to be illegal in nature.
The rationale for this policy is the protection extended to the
right to strike under the constitution and the law. It is
basically treated as a weapon that the law guarantees to
employees for the advancement of their interest and for their
protection.
What is the effect of defiance of assumption or certification
order or return-to-work order?
Non-compliance with the assumption/certification order of
the Secretary of Labor and Employment or a return-to-work
order issued pursuant thereto by either the Secretary or the
NLRC to which a labor dispute is certified, is considered an
illegal act committed in the course of the strike or lockout.
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What is the prescriptive period for offenses penalized under
the Labor Code?
As a rule, the prescriptive period of all criminal offenses
penalized under the Labor Code and the Rules to Implement
the Labor Codeis three (3) years from the time of commission
thereof. However, criminal cases arising from ULP which
prescribe within one (1) year from the time the acts
complained of were committed; otherwise, they shall be
forever barred. The running of the 1 year period, however, is
interrupted during the pendency of the labor case.
What is the prescriptive period for money claims?
Prescriptive period is three (3) years from accrual of cause of
action.
What is the prescriptive period for claims for allowances
and other benefits?
In cases of nonpayment of allowances and other monetary
benefits, if it is established that the benefits being claimed
have been withheld from the employee for a period longer
than three (3) years, the amount pertaining to the period
beyond the three-year prescriptive period is barred by
prescription. The amount that can only be demanded by the
aggrieved employee shall be limited to the amount of the
benefits withheld within three (3) years before the filing of
the complaint.
What is the prescriptive period for illegal dismissal?
An action for illegal dismissal prescribes in four (4) years from
accrual of cause of action.
What is the remedy of the party aggrieved by an order or
resolution of the Labor Arbiter?
A party aggrieved by any order or resolution of the Labor
Arbiter including those issued during execution proceedings
may file a verified petition to annul or modify such order or
resolution. The petition may be accompanied by an
application for the issuance of a temporary restraining order
and/or writ of preliminary or permanent injunction to enjoin
the Labor Arbiter, or any person acting under his/her
authority, to desist from enforcing said resolution or order.
What are the grounds of the petition for extraordinary
remedies?
The petition filed under this Rule may be entertained only on
any of the following grounds: (a) if there is prima facie
evidence of abuse of discretion on the part of the Labor
Arbiter; (b) if serious errors in the findings of facts are raised
which, if not corrected, would cause grave or irreparable
damage or injury to the petitioner; (c) if a party by fraud,
accident, mistake or excusable negligence has been
prevented from taking an appeal; (d) if made purely on
questions of law; or (e) if the order or resolution will cause
injustice if not rectified.

What are the requisites of the petition for extraordinary
remedies?
The petition for extraordinary remedies shall: (a) be
accompanied by a clear original or certified true copy of the
order or resolution assailed, together with clear copies of
documents relevant or related to the said order or resolution
for the proper understanding of the issue/s involved; (b)
contain the arbitral docket number and appeal docket
number, if any; (c) state the material date showing the
timeliness of the petition; (d) be verified by the petitioner
himself/herself in accordance with Section 4, Rule 7 of the
Rules of Court, as amended; (e) be in the form of a
memorandum which shall state the ground/s relied upon, the
argument/s in support thereof and the reliefs prayed for; (f)
be in three (3) legibly written or printed copies; and (g) be
accompanied by certificate of non-forum shopping, proof of
service upon the other party/ies and the Labor Arbiter who
issued the order or resolution being assailed or questioned;
and proof of payment of the required fees.
What is unfair labor practice?
An unfair labor practice act violates the right of workers to
self-organization, is inimical to the legitimate interests of
both labor and management, including their right to bargain
collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupts
industrial peace and hinders the promotion of healthy and
stable labor-management relations.
May elimination or diminution of benefits constitute
demotion?
Yes. The illegal and unjustified elimination or diminution of
certain benefits may result in illegal demotion. Under
established jurisprudence, there is demotion where the act of
the employer results in the lowering in position or rank or
reduction in salary of the employee. It involves a situation
where an employee is relegated to a subordinate or less
important position constituting a reduction to a lower grade
or rank with a corresponding decrease in duties and
responsibilities and usually accompanied by a decrease in
salary.
May elimination or diminution of benefits constitute
constructive dismissal?
Yes. Elimination or diminution of certain benefits may result
in the constructive dismissal of an employee. Constructive
dismissal is an involuntary resignation resorted to when
continued employment is rendered impossible, unreasonable
or unlikely; when there is a demotion in rank and/or a
diminution in pay; or when a clear discrimination, insensibility
or disdain by an employer becomes unbearable to the
employee that it could foreclose any choice by him except to
forego his continued employment.
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Termination of Employment in the Philippines
Terminating an employee in the Philippines is taken VERY
seriously and can be a complex process, especially after the
employee is regularized. The Philippine Constitution says, no
involuntary servitude in any form shall exist except as
punishment for a crime whereof the party shall have been
duly convicted. In view of the prohibition on involuntary
servitude, an employee is given the right to resign under Art.
285 of the Labor Code. The provision recognizes two kinds of
resignation – without cause and with cause. If the resignation
is without cause, the employee is required to give a 30-day
advance written notice to the employer, to enable the
employer to look for a replacement to prevent work
disruption. If the employee fails to give a written notice, he or
she runs the risk of incurring liability for damages. The same
provision also indicates the just causes for resignation (with
cause):
Serious insult to the honor and person of the employee;
Inhuman and unbearable treatment;
Crime committed against the person of the employee or any
of the immediate members of the employee’s family; and
Other analogous causes.
In this second type of resignation, the employee need not
serve a written notice. Forced resignation is not allowed and
is considered “constructive” dismissal – a dismissal in
disguise. Employee retirement is either voluntary or
compulsory under Art. 287 of the Labor Code.
Dismissal of an Employee in the Philippines
An equality of rights exists between employer and employee.
While the employer cannot force the employee to work
against his or her will, neither can the employee compel the
employer to continue giving him or her work if there is a
lawful reason not to do so. Thus, the employer may terminate
the services of an employee for just or authorized causes
after following the procedure laid down by law, but the
employer has the burden of proving the lawfulness of the
employee’s dismissal in the proper forum.
Just causes are blameworthy acts on the part of the
employee such as serious misconduct, willful disobedience,
gross and habitual neglect of duties, fraud or willful breach of
trust, commission of a crime and other analogous causes (Art.
282, Labor Code).
Authorized causes are of two types – business reasons and
disease. The business reasons are installation of labor-saving
devices, redundancy, retrenchment and closure or cessation
of operation (Art. 283, Labor Code). Before the employer can
terminate employment on the ground of disease, he must
obtain from a competent public health authority a
certification that the employee’s disease is of such a nature
and at such a stage that it can no longer be cured within a
period of six months even with medical attention (Art. 284,
Labor Code; Implementing Rules of Book VI, Labor Code).

Those hired on a temporary basis, that is, for a “term” or
“fixed period” are not regular employees, but are
“contractual employees.” Consequently, there is no illegal
dismissal when their services are terminated by reason of the
expiration of their contracts. Lack of notice of termination is
of no consequence, because a contract for employment for a
definite period terminates by its own term at the end of such
period.
An Illegal Strike can be cause for Termination of Employment
Employment is not deemed terminated when there is a bona
fide suspension of the operations of a business or
undertaking for a period not exceeding six months, or when
the employee fulfills a military or civic duty (Art. 286, Labor
Code). Under the Corporation Code (sec. 80), the surviving or
consolidated entity in a merger or consolidation
automatically assumes all rights and obligations, assets and
liabilities of the combining entities. This includes obligations
or liabilities under valid agreements, like labour contracts.
The surviving or consolidated entity must, therefore,
recognize the security of tenure and length of service of the
workers of the merging or consolidating corporations. By the
fact of merger or consolidation, a succession of employment
rights and obligations occurs.
Notice and prior procedural safeguards
As stated above, dismissals based on just causes contemplate
acts or omissions attributable to the employee while
dismissals based on authorized causes involve grounds –
business or health – allowing the employer to terminate. A
termination for an authorized cause requires payment of
separation pay. When the termination of employment is
declared illegal, reinstatement and full backwages are
mandated under Art. 279 of the Labor Code. If reinstatement
is no longer possible where the dismissal was unjust,
separation pay may be granted.
Procedurally, (1) if the dismissal is based on a just cause
under Art. 282 of the Labor Code, the employer must give the
employee two written notices and a hearing or opportunity
to be heard before terminating the employment, that is, a
notice specifying the grounds for which dismissal is sought
and, after hearing or opportunity to be heard, a notice of the
decision to dismiss; and (2) if the dismissal is based on
authorized causes under Arts. 283 and 284 of the Labor Code,
the employer must give the employee and the Department of
Labour and Employment written notices 30 days prior to the
effectivity of the separation.
Severance pay with Termination
As already noted, separation pay is required to be paid to the
employee when there is termination of employment by the
employer for an authorized cause, the amount of which
depends on the cause. If the termination is due to the
installation of labour-saving devices or redundancy, the
separation pay is one month’s pay for every year of service or
one month pay, whichever is higher (Art. 283, Labor Code). If
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the termination is due to retrenchment to prevent losses, or
closure or cessation of operation of the establishment not
due to serious business losses, or due to disease, the
separation pay is one-half month’s pay for every year of
service or one month pay, whichever is higher (Arts. 283 and
284, Labor Code). However, there is no requirement for
separation pay if the closure is due to serious business losses.
Avenues for redress
From the foregoing, four possible situations may be derived:
(1) the dismissal is for a just cause under Art. 282 of the Labor
Code, or for an authorized cause – business reason under Art.
283 or health reason under Art. 284 – and due process was
observed; (2) the dismissal is without just or authorized cause
but due process was observed; (3) and there no process; (4)
for a not observed.
In the first situation, the dismissal is undoubtedly valid and
the employer will not incur any liability, save for separation
pay when the dismissal is for an authorized cause.
In the second and third situations, where the dismissals are
illegal, Art. 279 of the Labor Code mandates that the
employee is entitled to reinstatement without loss of
seniority rights and other privileges and full backwages,
inclusive of allowances, and other benefits or their monetary
equivalent computed from the time the compensation was
not paid up to the time of actual reinstatement.
In the fourth situation, the dismissal should be upheld. While
the procedural infirmity cannot be cured, it should not
invalidate the dismissal. However, the employer should be
held liable for nominal damages for non-compliance with the
procedural requirements of due process. If the dismissal is for
an authorized cause, the employee is also entitled to
separation pay.
Compulsory arbitration of illegal dismissal cases is conducted
by the Labour Arbiters of the National Labour Relations
Commission and their decisions are appealable to the
Commission (Arts. 217 and 218, Labor Code).
In view of the stated preference for voluntary modes of
settling labour disputes under Art. 13 (3) of the Constitution
and Art. 211of the Labor Code, voluntary arbitration of illegal
dismissals is recognized on the basis of mutual agreement
between the parties (Art. 262, Labor Code).
Compulsory arbitration is both the process of settlement of
labour disputes by a government agency which has the
authority to investigate and issue an award binding on all the
parties, as well as a mode of arbitration where the parties are
compelled to accept the resolution of their dispute through
arbitration by a third party.
While a voluntary arbitrator is not part of the labour
department, he or she renders arbitration services provided

for under labour laws. Generally, the voluntary arbitrator is
expected to decide only questions that are expressly
delineated by the submission agreement. However, since
arbitration is the final resort for the adjudication of disputes,
the arbitrator can assume that he or she has the power to
make a final settlement. Thus, assuming that the submission
agreement empowers the arbitrator to decide whether an
employee was discharged for just cause, the arbitrator can
reasonably assume that his or her powers extend beyond
giving a mere yes-or-no answer and include the authority to
reinstate with or without back pay.
Difference between a Just and Authorized Cause of
Termination
Just cause refers to a wrong doing committed by the
employer or employee on the basis of which the aggrieved
party may terminate the employer-employee relationship.
Authorized cause refers to a cause brought about by changing
economic or business conditions of the employer.
Causes for Termination by the Employer
Serious misconduct;
Willful disobedience of employer’s lawful orders connected
with work;
Gross and habitual neglect of duty;
Fraud or breach of trust;
Commission of a crime or offense against the employer,
employer’s family, or representative; and
Other analogous causes.
Just Causes for Termination by the Employee
Serious insult by the employer or his or her representative on
the honor and person of the employee;
Inhuman and unbearable treatment accorded the employee
by the employer or his or her representative;
Commission of a crime by the employer or his or her
representative against the person of the employee or any of
the immediate members of his or her family; and
Other analogous causes.
Authorized Causes for Termination
Installation of labor-saving devices;
Redundancy;
Retrenchment to prevent losses;
Closure or cessation of business; and
Disease not curable within six months as certified by
competent public authority, and continued employment of
the employee is prejudicial to his or her health or to the
health of his or her co-employees.
Due Process in the Context of Termination of Employment
Due process means the right of an employee to be notified of
the reason for his or her dismissal and, in case of just causes,
to be provided the opportunity to defend himself or herself.
Components of Due Process in Termination Cases
In a termination for a just cause, due process involves the
two-notice rule:
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A notice of intent to dismiss specifying the ground for
termination, and giving to said employee reasonable
opportunity within which to explain his or her side;
A hearing or conference where the employee is given
opportunity to respond to the charge, present evidence, or
rebut the evidence presented against him or her;
A notice of dismissal indicating that upon due consideration
of all the circumstances, grounds have been established to
justify the termination.
In a termination for an authorized cause, due process means
a written notice of dismissal to the employee specifying the
grounds given, at least 30 days before the date of
termination. A copy of the notice shall be furnished by the
Regional Office of the Department of Labor and Employment
of the Philippines (DOLE).
An Employee may Question the Legality of his or her
Dismissal
The legality of the dismissal may be questioned before the
Labor Arbiter of the National Labor Relations Commission
(NLRC) of the Philippines, through a complaint for illegal
dismissal. In establishments with a collective bargaining
agreement (CBA), the dismissal may be questioned through
the grievance machinery established under the CBA. If the
issue is not resolved at this level, it will be submitted to
voluntary arbitration.
Proving the Dismissal is Legal
In a case of illegal dismissal, the employer has the burden of
proving that the dismissal is legal.
Grounds for an Employee to Question his or her Dismissal
An employee may question his or her dismissal based on
substantive or procedural grounds. The Substantive aspect
pertains to the absence of a just or authorized cause
supporting the dismissal. The Procedural aspect refers to the
notice of termination or the opportunity to present an
explanation.
What are the rights afforded to an unjustly dismissed
employee?
An employee who is dismissed without just cause is entitled
to any or all of the following:
Reinstatement without loss of seniority rights, or separation
pay if reinstatement is not possible;
Full backwages, inclusive of allowances and other benefits or
their monetary equivalent from the time compensation was
withheld from him or her up to the time of reinstatement;
Damages and attorney’s fees if the dismissal was done in bad
faith.
Reinstatement
Reinstatement means restoration of the employee to the
position from which he or she has been unjustly removed.
Reinstatement without loss of seniority rights means that the
employee, upon reinstatement, should be treated in matters

involving seniority and continuity of employment as though
he or she had not been dismissed from work.
When a Labor Arbiter rules for an illegal dismissal,
reinstatement is immediately executory even pending appeal.
Forms in which reinstatement be effected
Reinstatement may be actual or payroll in nature, at the
option of the employer.
Full Backwages
Full backwages refer to all compensations, including
allowances and other benefits with monetary equivalent, that
should have been earned by the employee but was not
collected by him or her because of unjust dismissal. It
includes all the amounts he or she could have earned starting
from the date of dismissal up to the time of reinstatement.
In cases of illegal dismissal, a dismissed employee who has
found another job may still be entitled to collect full
backwages from his or her former employer. Full backwages
is a form of penalty imposed by law on an employer who
illegally dismisses his or her employee. The fact that the
dismissed employee may already be employed and earning
elsewhere does not extinguish the penalty.
The former position of the employee no longer exists at the
time of reinstatement
In that case, the employee shall be given a substantially
equivalent position in the same establishment without loss of
seniority rights and to backwages from the time
compensation was withheld up to the time of reinstatement.
Employee Benefits when the Establishment no longer exists
When an establishment no longer exists at the time an order
for reinstatement is made, the employee can claim benefits.
The employee is entitled to a separation pay equivalent to at
least one-month pay or at least one-month pay for every year
of service whichever is higher. A fraction of at least six
months shall be considered as one whole year. The period of
service is deemed to have lasted up to the time of closure of
the establishment. He or she may also claim backwages to
cover the period between dismissal from work and the
closure of the establishment.
Separation Pay
In authorized cause terminations, separation pay is the
amount given to an employee terminated due to
retrenchment, closure, or cessation of business or incurable
disease. The employee is entitled to receive the equivalent of
one month pay or one-half month pay, whichever is higher,
for every year service.
In just cause terminations, separation pay is also the amount
given to employees who have been dismissed without just
cause and could no longer be reinstated.
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Reinstatement is not possible so that separation pay shall be
given to an illegally dismissed employee
When company operations have ceased;
When the employee’s position or an equivalent thereof is no
longer available;
When the illegal dismissal case has engendered strained
relations between the parties, in cases of just causes and
usually when the position involved requires the trust and
confidence of the employer; and
When a substantial amount of years have lapsed from the
filing of the case to its finality.
Exception for an employee dismissed for just cause be
entitled to separation pay
As a rule, no. But in instances where the just cause for
dismissal is other than serious misconduct or moral turpitude,
the employee may be awarded Financial Assistance in the
amount of one month’s pay as a form of compassionate
justice.
Proof of Financial Losses is Necessary to Justify
Retrenchment
Yes. Proof of actual or imminent financial losses that are
substantive in character must be proven to justify
retrenchment.
Proof of Financial losses is NOT necessary to justify
redundancy
In redundancy, the existing manpower of the establishment is
in excess of what is necessary to run its operation in an
economical and efficient manner.
Other Conditions before an Employee may be Dismissed on
the Ground of Redundancy
It must be shown that:
Good faith in abolishing redundant position;
There is fair and reasonable criteria in selecting the
employees to be dismissed, such as but not limited to less
preferred status (e.g. temporary employee), efficiency, and
seniority; or
A one-month prior notice is given to the employee as
prescribed by law.
Failure to Comply with the Due Process Requirements
Failure to comply with the due process requirements will NOT
invalidate a dismissal with an otherwise established just or
authorized cause. The employee, however, will be entitled to
backwages from the time of termination till finality of the
decision confirming the presence of a just or authorized
cause.
Difference between Transfer and Promotion
Promotion is the advancement of an employee from one
position to another with an increase in duties and
responsibilities, and is usually accompanied by an increase in
salary. Promotion is a privilege and as such may be declined
by the employee.
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Transfer is a lateral movement that does not amount to a

promotion. It constitutes a valid exercise of management
prerogative, unless it is done to defeat an employee’s right to
self-organization, to get rid of undesirable workers, or to
penalize an employee of his or her union activities. If done in
good faith, management’s decision to transfer an employee
may not be questioned. An employee’s refusal to transfer
may constitute willful disobedience, a just cause for his or her
dismissal.