Labor Finals Reviewer

D2012 | Labor 1 Finals Reviewer
8. Working Conditions for Special Groups of areas and thus, prevent their heavy migration from
Workers rural to urban or foreign countries;
A. WOMEN (2) Include an assessment of the extent to which their
programs and/or projects integrate women in the
REPUBLIC ACT NO. 7192 development process and of the impact of said
programs or projects on women, including their
implications in enhancing the self-reliance of women in
AN ACT PROMOTING THE INTEGRATION OF improving their income;
WOMEN AS FULL AND EQUAL PARTNERS OF MEN
IN DEVELOPMENT AND NATION BUILDING AND (3) Ensure the active participation of women and
FOR OTHER PURPOSES. women's organizations in the development programs
and/or projects including their involvement in the
Section 1. Title. This Act shall be cited as the planning, design, implementation, management,
"Women in Development and Nation Building Act." monitoring and evaluation thereof;
Sec. 2. Declaration of Policy. The State recognizes (4) Collect sex-disaggregated data and include such
the role of women in nation building and shall ensure data in its program/project paper, proposal or strategy;
the fundamental equality before the law of women and
men. The State shall provide women rights and (5) Ensure that programs and/or projects are designed
opportunities equal to that of men. so that the percentage of women who receive
assistance is approximately proportionate to either
To attain the foregoing policy: their traditional participation in the targeted activities or
(1) A substantial portion of official development their proportion of the population, whichever is higher.
assistance funds received from foreign governments Otherwise, the following should be stated in the
and multilateral agencies and organizations shall be program/project paper, proposal or strategy;
set aside and utilized by the agencies concerned to (a) The obstacle in achieving the goal;
support programs and activities for women;
(b) The steps being taken to overcome those
(2) All government departments shall ensure that obstacles; and
women benefit equally and participate directly in the
development programs and projects of said (c) To the extent that steps are not being taken to
department, specifically those funded under official overcome those obstacles, why they are not being
foreign development assistance, to ensure the full taken.
participation and involvement of women in the (6) Assist women in activities that are of critical
development process; and significance to their self-reliance and development.
(3) All government departments and agencies shall Sec. 5. Equality in Capacity to Act. Women of legal
review and revise all their regulations, circulars, age, regardless of civil status, shall have the capacity
issuances and procedures to remove gender bias to act and enter into contracts which shall in every
therein. respect be equal to that of men under similar
Sec. 3. Responsible Agency. The National circumstances.
Economic and Development Authority (NEDA) shall In all contractual situations where married men have
primarily be responsible for ensuring the participation the capacity to act, married women shall have equal
of women as recipients in foreign aid, grants and rights.
loans. It shall determine and recommend the amount
To this end:
to be allocated for the development activity involving
women. (1) Women shall have the capacity to borrow and
obtain loans and execute security and credit
Sec. 4. Mandate. The NEDA, with the assistance of
arrangement under the same conditions as men;
the National Commission on the Role of Filipino
Women, shall ensure that the different government (2) Women shall have equal access to all government
departments, including its agencies and and private sector programs granting agricultural
instrumentalities which, directly or indirectly, affect the credit, loans and non-material resources and shall
participation of women in national development and enjoy equal treatment in agrarian reform and land
their integration therein: resettlement programs;
(1) Formulate and prioritize rural or countryside (3) Women shall have equal rights to act as
development programs or projects, provide income incorporators and enter into insurance contracts; and
and employment opportunities to women in the rural
cyrus | van | clara | adrian | chris | lei | diana | francis | mike | caloy | racle | che | anicka
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(4) Married women shall have rights equal to those of Sec. 11. Separability Clause. If for any reason any
married men in applying for passport, secure visas and section or provision of this Act is declared
other travel documents, without need to secure the unconstitutional or invalid, the other sections or
consent of their spouses. provisions hereof which are not affected thereby shall
continue to be in full force and effect.
In all other similar contractual relations, women shall
enjoy equal rights and shall have the capacity to act Sec. 12. Repealing Clause. The provisions of
which shall in every respect be equal to those of men Republic Act No. 386, otherwise known as the Civil
under similar circumstances. Code of the Philippines, as amended, and of Executive
Order No. 209, otherwise known as the Family Code of
Sec. 6. Equal Membership in Clubs. Women shall
the Philippines, and all laws, decrees, executive
enjoy equal access to membership in all social, civic
orders, proclamations, rules and regulations, or parts
and recreational clubs, committees, associations and
thereof, inconsistent herewith are hereby repealed.
similar other organizations devoted to public purpose.
They shall be entitled to the same rights and privileges Sec. 13. Effectivity Clause. The rights of women
accorded to their spouses if they belong to the same and all the provisions of this Act shall take effect
organization. immediately upon its publication in the Official Gazette
or in two (2) newspapers of general circulation.
Sec. 7. Admission to Military Schools. Any
provision of the law to the contrary notwithstanding,
consistent with the needs of the services, women shall
be accorded equal opportunities for appointment, 1. Women under the Constitution
admission, training, graduation and commissioning in Art. II, Sec. 14
all military or similar schools of the Armed Forces of
the Philippines and the Philippine National Police not The State recognizes the role of women in nation-
later than the fourth academic year following the building, and shall ensure the fundamental equality
approval of this Act in accordance with the standards before the law of women and men.
required for men except for those minimum essential Art XIII, Sec. 14
adjustments required by physiological differences
The State shall protect working women by providing
between sexes.
safe and healthful working conditions, taking into
Sec. 8. Voluntary Pag-IBIG, GSIS and SSS Coverage. account their maternal functions, and such facilities
Married persons who devote full time to managing and opportunities that will enhance their welfare and
the household and family affairs shall, upon the enable them to realize their full potential in the service
working spouse's consent, be entitled to voluntary of the nation.
Pag-IBIG (Pagtutulungan Ikaw, Bangko, Industriya
at Gobyerno), Government Service Insurance System
(GSIS) or Social Security System (SSS) coverage to PHILIPPINE TELEGRAPH AND TELEPHONE
the extent of one-half (1/2) of the salary and COMPANY v. NLRC
compensation of the working spouse. The
contributions due thereon shall be deducted from the Grace de Guzman was initially hired as a reliever for
salary of the working spouse. several employees who went on leave. Her
employment was co-terminus with the leave of the
The GSIS or the SSS, as the case may be, shall issue
employee she was temporarily replacing for several
rules and regulations necessary to effectively
times. On September 2, 1991, respondent was hired
implement the provisions of this section.
as a probationary employee, the probation period
Sec. 9. Implementing Rules. The NEDA, in being 150 days. She filled out job application forms,
consultation with the different government agencies but in the said forms, she misrepresented her status
concerned, shall issue rules and regulations as may be as single when in fact she was already married months
necessary for the effective implementation of Sections earlier. She had also misrepresented the same in her
2, 3 and 4, of this Act within six (6) months from its other reliever agreements with the company. When the
effectivity. company found out about misrepresentations, she was
Sec. 10. Compliance Report. Within six (6) months asked to explain them and she was at the same time
from the effectivity of this Act and every six (6) months reminded of the company policy of not accepting
thereafter, all government departments, including its married women for employment. In her explanation,
agencies and instrumentalities, shall submit a report to respondent De Guzman explained that she was not
Congress on their compliance with this Act. aware of PT&Ts policy and that all along she had not
deliberately hidden her true civil status. Unsatisfied by
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the said explanation, the company terminated her 2. Coverage

services. Hence, she filled a case for illegal dismissal,
backwages, and COLA. Omnibus Rules, Book III, Rule XII, Sec. 1
WON respondent Grace De Guzman was validly or General statement on coverage. This Rule shall
apply to all employers, whether operating for profit or
illegally dismissed. She was illegally dismissed (?)
not, including educational, religious and charitable
At the outset, the SC pointed out that the Constitution institutions, except to the Government and to
fully protected the rights of women from discrimination government-owned or controlled corporations and to
of all kinds, among others, in employment: employers of household helpers and persons in their
personal service insofar as such workers are
Article II, Sec. 14 expressly recognizes the role of
concerned.
women in nation-building and commands the state to
ensure at all times the fundamental equality between
men and women; Article XIII, Sec. 3 pointedly
3. Prohibited Acts
requires the State to afford full protection and to
promote full employment and equality of employment a. Night Work/Exception
opportunities for all, including an assurance of
entitlement to tenurial security of all workers; Article Art. 130. Nightwork prohibition. No woman,
XIII, Sec. 14 mandates that the State shall protect regardless of age, shall be employed or permitted or
working women through provisions or opportunities suffered to work, with or without compensation:
that would enable them to reach their full potential.
a. In any industrial undertaking or branch thereof
The Supreme Court further pointed out that many
between ten oclock at night and six oclock in the
labor and social laws on gender inequality have been
morning of the following day; or
passed, largely because of RPs being signatory to UN
Convention on the Elimination of all forms of b. In any commercial or non-industrial undertaking
Discrimination Against Women (CEDAW). or branch thereof, other than agricultural, between
midnight and six oclock in the morning of the following
In the Labor Code, the Court points out that Arts. 130
day; or
to 138 govern the rights of women workers. In Article
136 thereof, it is stipulated that c. In any agricultural undertaking at nighttime
unless she is given a period of rest of not less than
It shall be unlawful for an employer to require as a
nine (9) consecutive hours.
condition of employment or continuation of
employment that a woman shall not get married, or to Art. 131. Exceptions. The prohibitions prescribed by
stipulate expressly or tacitly that upon getting married, the preceding Article shall not apply in any of the
a woman employee shall be deemed resigned or following cases:
separated, or to actually dismiss, discharge,
discriminate, or otherwise prejudice a woman a. In cases of actual or impending emergencies
employee merely by reason of marriage. caused by serious accident, fire, flood, typhoon,
The Court pointed out that PT&Ts company policy on earthquake, epidemic or other disasters or calamity, to
non-employment of married women was in direct prevent loss of life or property, or in cases of force
contravention of aforesaid provision of the Labor majeure or imminent danger to public safety;
Code, and of the previously cited laws. It found that b. In case of urgent work to be performed on
Respondent Grace de Guzman was forced to machineries, equipment or installation, to avoid serious
misrepresent her status as being single when in fact loss which the employer would otherwise suffer;
she was married, by the said illegal company policy for
fear of being dismissed from work. Hence such c. Where the work is necessary to prevent serious
concealment could hardly be considered as willful or in loss of perishable goods;
bad faith. Hence, cannot be made basis as termination d. Where the woman employee holds a responsible
of employment for loss of confidence. The Court position of managerial or technical nature, or where
further noted that while loss of confidence is a just the woman employee has been engaged to provide
cause for termination of employment, it should not be health and welfare services;
simulated. It must rest on an actual breach of duty
e. Where the nature of the work requires the
committed by the employee and not on the employers
manual skill and dexterity of women workers and the
caprices. It should never be used as a subterfuge for
same cannot be performed with equal efficiency by
causes which are improper, illegal, or unjustified.
male workers;
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f. Where the women employees are immediate Duncans employer Glaxo had a company policy
members of the family operating the establishment or prohibiting its employees from marrying the employees
undertaking; and of any competing firm. Duncan violated this policy
g. Under other analogous cases exempted by the compelling Glaxo to transfer Duncan in order to avoid
Secretary of Labor and Employment in appropriate the conflict of interest brought about by his marriage.
regulations. Duncan refused to be transferred and contends that he
had been constructively dismissed by Glaxo.
b. Discrimination The policy is a valid exercise of management

prerogative as it only seeks to avoid any conflicting
Art. 135. Discrimination prohibited. It shall be interest. The company merely wants to protect its
unlawful for any employer to discriminate against any
interest from possible compromising situations such as
woman employee with respect to terms and conditions
of employment solely on account of her sex. employees having personal interests in any competitor
company which may influence their actions and
The following are acts of discrimination: consequently deprive Glaxo of profits or competitor-
companys gaining access to Glaxos secrets,
a. Payment of a lesser compensation, including procedures, policies. The company has a right to
wage, salary or other form of remuneration and fringe guard its trade secrets, manufacturing formulas
benefits, to a female employees as against a male marketing strategies and other confidential programs
employee, for work of equal value; and and information from competitors in order to assure its
b. Favoring a male employee over a female right to reasonable returns on investments and
employee with respect to promotion, training expansion and growth.
opportunities, study and scholarship grants solely on
account of their sexes.
Criminal liability for the willful commission of any d. Discharge to prevent enjoyment of benefits
unlawful act as provided in this Article or any violation
of the rules and regulations issued pursuant to Section Art. 137. Prohibited acts. It shall be unlawful for any
2 hereof shall be penalized as provided in Articles 288 employer:
and 289 of this Code: Provided, That the institution of
any criminal action under this provision shall not bar 1. To deny any woman employee the benefits
the aggrieved employee from filing an entirely separate provided for in this Chapter or to discharge any woman
and distinct action for money claims, which may employed by him for the purpose of preventing her
include claims for damages and other affirmative from enjoying any of the benefits provided under this
reliefs. The actions hereby authorized shall proceed Code.
independently of each other.
e. Discharge on account of pregnancy

c. Stipulation against Marriage 2. To discharge such woman on account of her
pregnancy, or while on leave or in confinement due to
Art. 136. Stipulation against marriage. It shall be her pregnancy;
unlawful for an employer to require as a condition of
employment or continuation of employment that a 3. To discharge or refuse the admission of such
woman employee shall not get married, or to stipulate woman upon returning to her work for fear that she
expressly or tacitly that upon getting married, a woman may again be pregnant.
employee shall be deemed resigned or separated, or
to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by f. Discharge on account of Testimony
reason of her marriage. Book III, Rule XII, Sec. 13 (d)
Prohibited acts. It shall be unlawful for any
employer:
DUNCAN V. GLAXO (d) To discharge any woman or child or any other
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employee for having filed a complaint or having employers to their employees.

testified or being about to testify under the Code;
4. Facilities 5. Special Women Workers

Art. 132. Facilities for women. The Secretary of Art. 138. Classification of certain women workers.
Labor and Employment shall establish standards that Any woman who is permitted or suffered to work, with
will ensure the safety and health of women employees. or without compensation, in any night club, cocktail
In appropriate cases, he shall, by regulations, require lounge, massage clinic, bar or similar establishments
any employer to: under the effective control or supervision of the
employer for a substantial period of time as
a. Provide seats proper for women and permit them determined by the Secretary of Labor and
to use such seats when they are free from work and Employment, shall be considered as an employee of
during working hours, provided they can perform their such establishment for purposes of labor and social
duties in this position without detriment to efficiency; legislation.
b. To establish separate toilet rooms and lavatories
for men and women and provide at least a dressing
room for women; 6. Maternity Leave
c. To establish a nursery in a workplace for the
1. Social Security Act of 1997, Sec. 14-A, RA No. 828
benefit of the women employees therein; and
2. SEC. 14-A. Maternity Leave Benefit. - A female
d. To determine appropriate minimum age and
member who has paid at least three (3) monthly
other standards for retirement or termination in special
contributions in the twelve-month period immediately
occupations such as those of flight attendants and the
preceding the semester of her childbirth or miscarriage
like.
shall be paid a daily maternity benefit equivalent to one
Art. 134. Family planning services; incentives for hundred percent (100%) of her average daily salary
family planning. credit for sixty (60) days or seventy-eight (78) days in
case of caesarian delivery, subject to the following
a. Establishments which are required by law to conditions:
maintain a clinic or infirmary shall provide free family "(a) That the employee shall have notified her
planning services to their employees which shall employer of her pregnancy and the probable date of
include, but not be limited to, the application or use of her childbirth, which notice shall be transmitted to the
contraceptive pills and intrauterine devices. SSS in accordance with the rules and regulations it
b. In coordination with other agencies of the may provide;
government engaged in the promotion of family
planning, the Department of Labor and Employment
shall develop and prescribe incentive bonus schemes
to encourage family planning among female workers in 7. Sexual Harrassment
any establishment or enterprise.
Republic Act No. 7877- Anti-Sexual Harassment
Omnibus Rules, Book III, Rule XII, Sec. 11 Act of 1995
Family planning services. Employers who habitually Section 1. Title. - This Act shall be known as the "Anti-
employ more than two hundred (200) workers in any Sexual Harassment Act of 1995."
locality shall provide free family-planning services to
their employees and their spouses which shall include Section 2. Declaration of Policy. - The State shall
but not limited to, the application or use of value the dignity of every individual, enhance the
contraceptives. development of its human resources, guarantee full
respect for human rights, and uphold the dignity of
Subject to the approval of the Secretary of Labor and workers, employees, applicants for employment,
Employment, the Bureau of Women and Young students or those undergoing training, instruction or
Workers shall, within thirty (30) days from the effective education. Towards this end, all forms of sexual
date of these Rules, prescribe the minimum harassment in the employment, education or training
requirements of family planning services to be given by environment are hereby declared unlawful.
Section 3. Work, Education or Training-Related,
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Sexual Harassment Defined. - Work, education or of sexual harassment and to provide the procedures
training-related sexual harassment is committed by an for the resolution, settlement or prosecution of acts of
employer, employee, manager, supervisor, agent of the sexual harassment. Towards this end, the employer or
employer, teacher, instructor, professor, coach, trainor, head of office shall:
or any other person who, having authority, influence or
moral ascendancy over another in a work or training
(a) Promulgate appropriate rules and regulations in
or education environment, demands, requests or consultation with and jointly approved by the
otherwise requires any sexual favor from the other, employees or students or trainees, through their duly
regardless of whether the demand, request or designated representatives, prescribing the procedure
requirement for submission is accepted by the object for the investigation of sexual harassment cases and
of said act. the administrative sanctions therefor.
(a) In a work-related or employment environment,
Administrative sanctions shall not be a bar to
sexual harassment is committed when:
prosecution in the proper courts for unlawful acts of
(1) The sexual favor is made as a condition in the sexual harassment.
hiring or in the employment, re-employment or
continued employment of said individual, or in The said rules and regulations issued pursuant to this
granting said individual favorable compensation, terms subsection (a) shall include, among others, guidelines
of conditions, promotions, or privileges; or the refusal
to grant the sexual favor results in limiting, segregating on proper decorum in the workplace and educational
or classifying the employee which in any way would or training institutions.
discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said (b) Create a committee on decorum and investigation
employee; of cases on sexual harassment. The committee shall
(2) The above acts would impair the employee's rights conduct meetings, as the case may be, with officers
or privileges under existing labor laws; or and employees, teachers, instructors, professors,
coaches, trainors, and students or trainees to increase
(3) The above acts would result in an intimidating,
hostile, or offensive environment for the employee. understanding and prevent incidents of sexual
harassment. It shall also conduct the investigation of
(b) In an education or training environment, sexual
alleged cases constituting sexual harassment.
harassment is committed:
(1) Against one who is under the care, custody or In the case of a work-related environment, the
supervision of the offender; committee shall be composed of at least one (1)
representative each from the management, the union,
(2) Against one whose education, training, if any, the employees from the supervisory rank, and
apprenticeship or tutorship is entrusted to the offender; from the rank and file employees.
(3) When the sexual favor is made a condition to the In the case of the educational or training institution, the
giving of a passing grade, or the granting of honors committee shall be composed of at least one (1)
and scholarships, or the payment of a stipend, representative from the administration, the trainors,
allowance or other benefits, privileges, or instructors, professors or coaches and students or
consideration; or trainees, as the case may be.
(4) When the sexual advances result in an intimidating, The employer or head of office, educational or training
hostile or offensive environment for the student, institution shall disseminate or post a copy of this Act
trainee or apprentice. for the information of all concerned.
Any person who directs or induces another to commit Section 5. Liability of the Employer, Head of Office,
any act of sexual harassment as herein defined, or Educational or Training Institution. - The employer or
who cooperates in the commission thereof by another head of office, educational or training institution shall
without which it would not have been committed, shall be solidarily liable for damages arising from the acts
also be held liable under this Act. of sexual harassment committed in the employment,
Section 4. Duty of the Employer or Head of Office in a education or training environment if the employer or
Work-related, Education or Training Environment. - It head of office, educational or training institution is
shall be the duty of the employer or the head of the informed of such acts by the offended party and no
work-related, educational or training environment or immediate action is taken.
institution, to prevent or deter the commission of acts Section 6. Independent Action for Damages. -
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Nothing in this Act shall preclude the victim of work, Petitioner allegedly touched and caressed a secretary
education or training-related sexual harassment from at the office. He claimed that the delay in the filing of
instituting a separate and independent action for the complaint shows that the offense imputed upon
damages and other affirmative relief. him was a mere afterthought.
Section 7. Penalties. - Any person who violates
RA No. 7877 has no retroactive application, hence, it
the provisions of this Act shall, upon conviction, be
penalized by imprisonment of not less than one (1) cannot be applied to this case. The LA has to rely on
month nor more than six (6) months, or a fine of not the MEC report and the common connotation of sexual
less than Ten thousand pesos (P10,000) nor more harassment as it is generally understood by the public
than Twenty thousand pesos (P20,000), or both such in resolving the case brought before it.
fine and imprisonment at the discretion of the court.
Fear of retaliation and backlash and social humiliation
Any action arising from the violation of the provisions and embarrassment are sufficient justification for delay
of this Act shall prescribe in three (3) years.
in instituting the complaint for sexual harassment.
AZUCENA
B. MINORS
Victim of sexual harassment may be male or
Reference to Special Laws: (only provisions that zone-
female.
in on the issue are included)
Sexual harassment when a person RA 7610 - AN ACT PROVIDING FOR STRONGER
demands, requests or otherwise requires any DETERRENCE AND SPECIAL PROTECTION
sexual favor from another. AGAINST CHILD ABUSE, EXPLOITATION AND
Harasser may be an employer, fellow DISCRIMINATION, AND FOR OTHER PURPOSES
employee, manager, supervisor, agent of the RA 9231 - AN ACT PROVIDING FOR THE
employee, teacher, instructor, professor, ELIMINATION OF THE WORST FORMS OF CHILD
coach, trainer or any other person who has LABOR AND AFFORDING STRONGER
authority, influence or moral ascendancy over PROTECTION FOR THE WORKING CHILD,
AMENDING FOR THIS PURPOSE RA 7610
the person harassed.
Harassment is committed regardless of
whether demand or request for sexual favor is
Omnibus Rules, Book III, Rule XII, Secs 2-3
accepted by the person harassed.
SECTION 2. Employable age. Children below
fifteen (15) years of age may be allowed to work under
PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORP the direct responsibility of their parents or guardians in
v. NLRC any non-hazardous undertaking where the work will
not in any way interfere with their schooling. In such
The respondent threw a stapler at the plant manager, cases, the children shall not be considered as
when she got fed up with his sexual advances. employees of the employers or their parents or
guardians.
The gravamen of the offense in sexual harassment is
not the violation of the employees sexuality but the SECTION 3. Eligibility for employment. Any person
of either sex, between 15 and 18 years of age, may be
abuse of power by the employer. Strictly speaking,
employed in any non-hazardous work. No employer
there is no time period within which he or she is shall discriminate against such person in regard to
expected to complain through the proper channels. terms and conditions of employment on account of his
The time to do so may vary depending upon the age.
circumstances and more importantly the emotional
threshold of the employee For purposes of this Rule, a non-hazardous work or
undertaking shall mean any work or activity in which
the employee is not exposed to any risk which
LIBRES v. NLRC constitutes an imminent danger to his safety and
health. The Secretary of Labor and Employment shall
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from time to time publish a list of hazardous work and employed except:
activities in which persons 18 years of age and below (1) When a child works directly under the sole
cannot be employed. responsibility of his parents or legal guardian and
where only members of the employer's family are
employed: Provided, however, That his employment
neither endangers his life, safety and health and
1. Minors under the Constitution morals, nor impairs his normal development: Provided,
Art. II, Sec. 13 further, That the parent or legal guardian shall provide
the said minor child with the prescribed primary and/or
The State recognizes the vital role of the youth in secondary education; or
nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-
(2) When a child's employment or participation in
being. It shall inculcate in the youth patriotism and
public & entertainment or information through cinema,
nationalism, and encourage their involvement in public
theater, radio or television is essential: Provided, The
and civic affairs.
employment contract concluded by the child's parent
or guardian, with the express agreement of the child
concerned, if possible, and the approval of the
2. Coverage
Department of Labor and Employment: Provided, That
Omnibus Rules, Book III, Rule XII, Sec. 1 the following requirements in all instances are strictly
complied with:
General statement on coverage. This Rule shall
apply to all employers, whether operating for profit or
not, including educational, religious and charitable (a) The employer shall ensure the protection, health,
institutions, except to the Government and to safety and morals of the child;
government-owned or controlled corporations and to
employers of household helpers and persons in their (b) the employer shall institute measures to prevent
personal service insofar as such workers are the child's exploitation or discrimination taking into
concerned. account the system and level of remuneration, and the
duration and arrangement of working time; and;
3. Employment of Children (c) The employer shall formulate and implement,

subject to the approval and supervision of competent
Art. 139. Minimum employable age. authorities, a continuing program for training and skill
a. No child below fifteen (15) years of age shall be acquisition of the child.
employed, except when he works directly under the
sole responsibility of his parents or guardian, and his In the above exceptional cases where any such child
employment does not in any way interfere with his may be employed, the employer shall first secure,
schooling. before engaging such child, a work permit from the
Department of Labor and Employment which shall
b. Any person between fifteen (15) and eighteen ensure observance of the above requirement.
(18) years of age may be employed for such number of
hours and such periods of the day as determined by The Department of Labor Employment shall
the Secretary of Labor and Employment in appropriate promulgate rules and regulations necessary for the
regulations. effective implementation of this Section.
c. The foregoing provisions shall in no case allow
the employment of a person below eighteen (18) years Section 13. Non-formal Education for Working
of age in an undertaking which is hazardous or Children. The Department of Education, Culture and
deleterious in nature as determined by the Secretary of Sports shall promulgate a course design under its non-
Labor and Employment. formal education program aimed at promoting the
intellectual, moral and vocational efficiency of working
children who have not undergone or finished
RA 7610, Secs 12-16 elementary or secondary education. Such course
Section 12. Employment of Children. Children design shall integrate the learning process deemed
below fifteen (15) years of age may not (?) be most effective under given circumstances.
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Section 14. Prohibition on the Employment of - fruit picking involving climbing

Children in Certain Advertisements. No person 3. Work with dangerous machinery, equipment and
shall employ child models in all commercials or tools, or which involves manual handling or transport
advertisements promoting alcoholic beverages, of heavy loads, such as in:
intoxicating drinks, tobacco and its byproducts and
violence. - Logging
- Construction
Section 15. Duty of Employer. Every employer
- Quarrying
shall comply with the duties provided for in Articles 108
and 109 of Presidential Decree No. 603. - Operating agricultural machinery in mechanized
farming
Section 16. Penalties. Any person who shall violate - Metal work and welding
any provision of this Article shall suffer the penalty of a
fine of not less than One thousand pesos (P1,000) but - Driving or operating heavy equipment such as
not more than Ten thousand pesos (P10,000) or payloaders, backhoes, bulldozers, cranes, pile driving
imprisonment of not less than three (3) months but not equipment, trailers, road rollers, tractor lifting
more than three (3) years, or both at the discretion of appliances, scaffold winches, tractor lifting appliances,
the court; Provided, That, in case of repeated scaffold winches, hoists, excavators and loading
violations of the provisions of this Article, the offender's machines
license to operate shall be revoked. - Operating or setting motor-driven machines such
as saws, presses and wood working machines
- Operating power-driven tools such as drills and
DOLE D.O. No. 04, S. 99 Re: Hazardous work for jack hammers
persons below 18 years - Stevedoring
Section 3 Coverage- The following work and - Working in airport hangars
activities are hereby declared hazardous to persons
- Working in warehouses
below 18 years of age and to other work and activities
that may subsequently be declared as such: - Working in docks
1. Work which exposes children to physical, 4. Work in an unhealthy environment which may
psychological or sexual abuses, such as in expose children to hazardous processes, to
temperatures, noise levels or vibrations damaging to
- lewd shows (stripteasers, burlesque dancers,
their health, to toxic, corrosive, poisonous, noxious,
and the like)
explosive, flammable and combustible substances or
- cabarets composite, to harmful biological agents, or to other
- bars (KTV, karaoke bars) dangerous chemicals including pharmaceuticals such
as in:
- dance halls
- manufacture of handling pyrotechnics
- bath houses and massage clinics
- tanning
- escort services
- pesticide spraying
- gambling halls and places
- blacksmithing, hammersmiths, forging
2. Work underground, underwater; at dangerous
heights or unguarded heights two meters and above, - extracting lard and oil
or in confined places such as in: - tiling and greasing of heavy machinery
- mining - fiber and plastic preparing
- deep sea fishing / diving - bleaching, dyeing, and finishing of textiles using
- installing and repairing of telephone, telegraph chemicals
and electrical lines; cable fitters - embalming and undertakers
- painting buildings - painting or as finishers in metal craft industries
- window cleaning - applying of adhesive/ solvent in footwear,
Page 9 of 124
handicraft and woodwork industries RA 9231, Sec 3 on Sec 12-D and Sec 5 on Sec 14
- brewing and distilling of alcoholic beverages Sec. 12-D. Prohibition Against Worst Forms of
- recycling of batteries and containers or material Child Labor. - No child shall be engaged in the worst
used or contaminated with chemicals forms of child labor. The phrase "worst forms of child
labor" shall refer to any of the following:
- working in abattoirs or slaughter houses
(1) All forms of slavery, as defined under the "Anti-
- garbage collecting trafficking in Persons Act of 2003", or practices similar
- handling of animal manure in poultry houses or to slavery such as sale and trafficking of children, debt
as fertilizer (compost and other decaying matter bondage and serfdom and forced or compulsory labor,
included) in farming including recruitment of children for use in armed
conflict; or
- working in hospitals or other health care facilities
(2) The use, procuring, offering or exposing of a child
- assisting in laboratories and x-ray work for prostitution, for the production of pornography or for
- welding pornographic performances; or
- working in furnaces of kilns
(3) The use, procuring or offering of a child for illegal or
- working in dicotheques illicit activities, including the production and trafficking
- working in video arcades of dangerous drugs and volatile substances prohibited
under existing laws; or
5. Work under particularly difficult conditions such
as work for long hours or during the night, or work
where the child is unreasonably confined to the (4) Work which, by its nature or the circumstances in
premises of the employer. which it is carried out, is hazardous or likely to be
harmful to the health, safety or morals of children, such
that it:
4. Hours of Work
a) Debases, degrades or demeans the intrinsic worth
RA 9231, Sec 3 on Sec 12-A and dignity of a child as a human being; or
Sec. 12-A. Hours of Work of a Working Child. - Under b) Exposes the child to physical, emotional or sexual
the exceptions provided in Section 12 of this Act, as abuse, or is found to be highly stressful psychologically
amended: or may prejudice morals; or
(1) A child below fifteen (15) years of age may be c) Is performed underground, underwater or at
allowed to work for not more than twenty (20) hours a dangerous heights; or
week: Provided, That the work shall not be more than
four (4) hours at any given day; d) Involves the use of dangerous machinery,
equipment and tools such as power-driven or
(2) A child fifteen (15) years of age but below eighteen explosive power-actuated tools; or
(18) shall not be allowed to work for more than eight
(8) hours a day, and in no case beyond forty (40) hours e) Exposes the child to physical danger such as, but
a week; not limited to the dangerous feats of balancing,
physical strength or contortion, or which requires the
(3) No child below fifteen (15) years of age shall be manual transport of heavy loads; or
allowed to work between eight o'clock in the evening
and six o'clock in the morning of the following day and f) Is performed in an unhealthy environment exposing
no child fifteen (15) years of age but below eighteen the child to hazardous working conditions, elements,
(18) shall be allowed to work between ten o'clock in substances, co-agents or processes involving ionizing,
the evening and six o'clock in the morning of the radiation, fire, flammable substances, noxious
following day. components and the like, or to extreme temperatures,
noise levels, or vibrations; or
5. Prohibition against worst forms of child labor
Page 10 of 124
g) Is performed under particularly difficult conditions; or Nonhazardous work where the employee is
not exposed to any risk which constitutes an
h) Exposes the child to biological agents such as imminent danger to his safety and health.
bacteria, fungi, viruses, protozoans, nematodes and
other parasites; or Any person, regardless of sex, between 15
and 18 may be employed in any
i) Involves the manufacture or handling of explosives nonhazardous work.
and other pyrotechnic products."
Hazardous work employee must be 18 and
above.
Sec. 14. Prohibition on the Employment of
Children in Certain Advertisements. - No child shall RA 7610 (on child abuse) declares that the
be employed as a model in any advertisement directly State shall intervene on behalf of the child
or indirectly promoting alcoholic beverages, when the parent, guardian, teacher or person
intoxicating drinks, tobacco and its byproducts,
having care or custody of the child fails or is
gambling or any form of violence or pornography.
unable to protect the child against abuse,
exploitation and discrimination.
RA 7658 prohibits employment of children
6. Discrimination
below 15 years of age. It allows of exceptions,
Art. 140. Prohibition against child discrimination. but subject to strict conditions.
No employer shall discriminate against any person in
respect to terms and conditions of employment on RA 7323 aims to help poor but deserving
account of his age. students to pursue their education by
encouraging their employment during summer
and/or Christmas vacations. It allows
employers, employing at least 50 persons, to
7. Jurisdiction
pay those students only 60% of their salaries
RA 9231, Sec 9 on Sec 16-A or wages. The 40% will be paid by the
Sec. 16-A. Jurisdiction - The family courts shall have government through education vouchers.
original jurisdiction over all cases involving offenses
punishable under this Act: Provided, That in cities or
provinces where there are no family courts yet, the C. HOUSEHELPERS/CAREGIVERS
regional trial courts and the municipal trial courts shall
have concurrent jurisdiction depending on the
1. Definition
penalties prescribed for the offense charged. Omnibus Rules, Book III, Rule XIII, Sec 1 (b)
The preliminary investigation of cases filed under this
Act shall be terminated within a period of thirty (30) General statement on coverage. (a) The provisions
days from the date of filing. of this Rule shall apply to all househelpers whether
employed on full or part-time basis.
If the preliminary investigation establishes a prima
facie case, then the corresponding information shall be (b) The term "househelper" as used herein is
filed in court within forty eight (48) hours from the synonymous to the term "domestic servant" and shall
termination of the investigation. refer to any person, whether male or female, who
renders services in and about the employer's home
Trial of cases under this Act shall be terminated by the and which services are usually necessary or desirable
court not later than ninety (90) days from the date of for the maintenance and enjoyment thereof, and
filing of information. Decision on said cases shall be ministers exclusively to the personal comfort and
rendered within a period of fifteen (15) days from the enjoyment of the employer's family.
date of submission of the case.
2. Coverage
AZUCENA
Page 11 of 124
Art. 141. Coverage. This Chapter shall apply to all Paraaque, Las Pias, Pasig, Marikina, Valenzuela,
persons rendering services in households for Taguig and Pateros in Metro Manila and in highly
compensation. urbanized cities;
2. Six hundred fifty pesos (P650.00) a month for
"Domestic or household service" shall mean service in those in other chartered cities and first-class
the employers home which is usually necessary or municipalities; and
desirable for the maintenance and enjoyment thereof
and includes ministering to the personal comfort and 3. Five hundred fifty pesos (P550.00) a month for
convenience of the members of the employers those in other municipalities.
household, including services of family drivers. Provided, That the employers shall review the
employment contracts of their househelpers every
Omnibus Rules, Book III, Rule XIII, Sec 3 three (3) years with the end in view of improving the
terms and conditions thereof.
Children of househelpers. The children and
relatives of a househelper who live under the
employer's roof and who share the accommodations Provided, further, That those househelpers who are
provided for the househelpers by the employer shall receiving at least One thousand pesos (P1,000.00)
not be deemed as househelpers if they are not shall be covered by the Social Security System (SSS)
otherwise engaged as such and are not required to and be entitled to all the benefits provided thereunder.
perform any substantial household work.
Art. 144. Minimum cash wage. The minimum wage
rates prescribed under this Chapter shall be the basic
3. Non-Household Work cash wages which shall be paid to the househelpers in
addition to lodging, food and medical attendance.
Art. 145. Assignment to non-household work. No
househelper shall be assigned to work in a Civil Code, Art. 1689. Household service shall always
commercial, industrial or agricultural enterprise at a be reasonably compensated. Any stipulation that
wage or salary rate lower than that provided for household service is without compensation shall be
agricultural or non-agricultural workers as prescribed void. Such compensation shall be in addition to the
herein. house helper's lodging, food, and medical attendance.
Omnibus Rules, Book III, Rule XIII, Sec 10 Omnibus Rules, Book III, Rule XIII, Sec 6-9
SECTION 6. Equivalent daily rate. The equivalent
Assignment to non-household work. No minimum daily wage rate of househelpers shall be
househelper shall be assigned to work in a determined by dividing the applicable minimum
commercial, industrial or agricultural enterprise at a monthly rate by thirty (30) days.
wage or salary rate lower than that provided for
agricultural and non-agricultural workers. SECTION 7. Payment by results. Where the
method of payment of wages agreed upon by the
employer and the househelper is by piece or output
basis, the piece or output rates shall be such as will
APEX MINING CO. v. NLRC assure the househelper of the minimum monthly or the
equivalent daily rate as provided in this issuance.
4. Conditions of Employment SECTION 8. Minimum cash wage. The minimum

wage rates prescribed under this Rule shall be basic
Compensation
cash wages which shall be paid to the househelpers in
Art. 143. Minimum wage. addition to lodging, food and medical attendance.
a. Househelpers shall be paid the following SECTION 9. Time and manner of payment. Wages
minimum wage rates: shall be paid directly to the househelper to whom they
are due at least once a month. No deductions
1. Eight hundred pesos (P800.00) a month for therefrom shall be made by the employer unless
househelpers in Manila, Quezon, Pasay, and Caloocan authorized by the househelper himself or by existing
cities and municipalities of Makati, San Juan,
Mandaluyong, Muntinlupa, Navotas, Malabon,
Page 12 of 124
laws. no case shall physical violence be inflicted upon the

househelper.
Hours of Work Education

Civil Code, Art. 1695. House helper shall not be Art. 146. Opportunity for education. If the
required to work more than ten hours a day. Every househelper is under the age of eighteen (18) years,
house helper shall be allowed four days' vacation each the employer shall give him or her an opportunity for at
month, with pay. least elementary education. The cost of education
shall be part of the househelpers compensation,
unless there is a stipulation to the contrary.
Vacation with Pay
Civil Code, Art. 1695. Every house helper shall be Civil Code, Art. 1691. If the house helper is under the
allowed four days' vacation each month, with pay. age of eighteen years, the head of the family shall give
an opportunity to the house helper for at least
elementary education. The cost of such education
shall be a part of the house helper's compensation,
Food/Living Quarters
unless there is a stipulation to the contrary.
Art. 148. Board, lodging, and medical attendance. Omnibus Rules, Book III, Rule XIII, Sec 11
The employer shall furnish the househelper, free of
charge, suitable and sanitary living quarters as well as Opportunity for education. If the househelper is
adequate food and medical attendance. under the age of eighteen (18) years, the employer
shall give him or her opportunity for at least elementary
education. The cost of such education shall be part of
Civil Code, Art. 1690. The head of the family shall
the househelper's compensation, unless there is a
furnish, free of charge, to the house helper, suitable
stipulation to the contrary.
and sanitary quarters as well as adequate food and
medical attendance.
Civil Code, Art. 1693. The house helper's clothes Term of Contract
shall be subject to stipulation. However, any contract
for household service shall be void if thereby the Art. 142. Contract of domestic service. The original
house helper cannot afford to acquire suitable clothing. contract of domestic service shall not last for more
than two (2) years but it may be renewed for such
Omnibus Rules, Book III, Rule XIII, Sec 13 periods as may be agreed upon by the parties.
Board, lodging and medical attendance. The
employer shall furnish the househelper free suitable Civil Code, Art. 1692. No contract for household
and sanitary living quarters as well as adequate food service shall last for more than two years. However,
and medical attendance. such contract may be renewed from year to year.
Omnibus Rules, Book III, Rule XIII, Sec 4
Treatment Employment contract. The initial contract for
household service shall not last for more than two (2)
Art. 147. Treatment of househelpers. The employer years. However, such contract may be renewed from
shall treat the househelper in a just and humane year to year.
manner. In no case shall physical violence be used
upon the househelper.
Termination
Civil Code Art. 1694. The head of the family shall
treat the house helper in a just and humane manner. In 1. Fixed Duration
no case shall physical violence be used upon the
house helper. Art. 149. Indemnity for unjust termination of
services. If the period of household service is fixed,
Omnibus Rules, Book III, Rule XIII, Sec 12 neither the employer nor the househelper may
Treatment of househelpers. The employer shall terminate the contract before the expiration of the
treat the househelper in a just and humane manner. In term, except for a just cause. If the househelper is
unjustly dismissed, he or she shall be paid the
Page 13 of 124
compensation already earned plus that for fifteen (15) (3) If the compensation is paid by the month, notice
days by way of indemnity. may be given, at the latest, on the fifth day of the
month, that the service shall cease at the end of the
If the househelper leaves without justifiable reason, he month.
or she shall forfeit any unpaid salary due him or her
not exceeding fifteen (15) days.
Employment Certificate
Civil Code, Art. 1697. If the period for household Art. 151. Employment certification. Upon the
service is fixed neither the head of the family nor the severance of the household service relation, the
house helper may terminate the contract before the employer shall give the househelper a written
expiration of the term, except for a just cause. If the statement of the nature and duration of the service and
house helper is unjustly dismissed, he shall be paid his or her efficiency and conduct as househelper.
the compensation already earned plus that for fifteen
days by way of indemnity. If the house helper leaves
Civil Code, Art. 1699. Upon the extinguishment of the
without justifiable reason, he shall forfeit any salary
service relation, the house helper may demand from
due him and unpaid, for not exceeding fifteen days.
the head of the family a written statement on the
Omnibus Rules, Book III, Rule XIII, Sec 14 nature and duration of the service and the efficiency
and conduct of the house helper.
Indemnity for unjust termination of service. If the Omnibus Rules, Book III, Rule XIII, Sec 15
period for household service is fixed, neither the
employer nor the househelper may terminate the
Employment certification. Upon the severance of
contract before the expiration of the term, except for a
the household service relationship, the househelper
just cause. If the househelper is unjustly dismissed, he
may demand from the employer a written statement of
or she shall be paid the compensation already earned
the nature and duration of the service and his or her
plus that for fifteen (15) days by way of indemnity.
efficiency and conduct as househelper.
If the househelper leaves without justifiable reason, he

or she shall forfeit any unpaid salary due him or her
not exceeding fifteen (15) days. Employment Records
Art. 152. Employment record. The employer may
keep such records as he may deem necessary to
2. Not Fixed reflect the actual terms and conditions of employment
of his househelper, which the latter shall authenticate
Art. 150. Service of termination notice. If the by signature or thumbmark upon request of the
duration of the household service is not determined employer.
either in stipulation or by the nature of the service, the
employer or the househelper may give notice to put an Omnibus Rules, Book III, Rule XIII, Sec 18
end to the relationship five (5) days before the
intended termination of the service. Employment records. The employer may keep such
records as he may deem necessary to reflect the
actual terms and conditions of employment of his
Civil Code, Art. 1698. If the duration of the household
househelper which the latter shall authenticate by
service is not determined either by stipulation or by the
signature or thumbmark upon request of the employer.
nature of the service, the head of the family or the
house helper may give notice to put an end to the
service relation, according to the following rules:
Funeral Expenses
(1) If the compensation is paid by the day, notice may
be given on any day that the service shall end at the Civil Code, Art. 1696. In case of death of the house
close of the following day; helper, the head of the family shall bear the funeral
expenses if the house helper has no relatives in the
(2) If the compensation is paid by the week, notice place where the head of the family lives, with sufficient
may be given, at the latest on the first business day of means therefor.
the week, that the service shall be terminated at the
end of the seventh day from the beginning of the week; Omnibus Rules, Book III, Rule XIII, Sec 16-17
Funeral expenses. In case of death of the
Page 14 of 124
househelper, the employer shall bear the funeral rebuys them after such processing or fabrication,
expenses commensurate to the standards of life of the either by himself or through some other person.
deceased.
Disposition of the househelper's body. Unless so
desired by the househelper or by his or her guardian 2. Definition
with court approval, the transfer or use of the body of
Sec. 2, D.O. No. 5
the deceased househelper for purposes other than
burial is prohibited. When so authorized by the Section 2. Definitions. As used in this Rule, the
househelper, the transfer, use and disposition of the following terms shall have the meanings indicated
body shall be in accordance with the provisions of hereunder:
Republic Act No. 349 l. Industrial Homework is a system of production
under which work for an employer or contractor is
carried out by a homeworker at his/ her home.
AZUCENA: Materials may or may not be furnished by the
A househelp, laundrywoman, driver, houseboy, employer or the contractor.
gardener working in staff houses of a It differs from regular factory production principally in
company who attends to the needs of the that, it is a decentralized form of production where
companys guests and other persons availing there is ordinarily very little supervision or regulation of
methods of work.
themselves of said facilities is NOT a
househelper. He is an industrial worker who m. Industrial Homeworker means a worker who is
should be paid the industrial rate. engaged in industrial homework.
n. Home means any room, house, apartment or
other premises used regularly, in whole or in part, as
D. HOMEWORKERS dwelling place, except those situated within the
premises or compound of an employer, contractor, or
1. Coverage and Regulation subcontractor and the work performed therein is under
the active or personal supervision of the latter.
Art. 153. Regulation of industrial homeworkers.
The employment of industrial homeworkers and field o. Employer means any natural or artificial person
personnel shall be regulated by the government who, for his own account or benefit, or on behalf of any
through the appropriate regulations issued by the person residing outside the Philippines, directly or
Secretary of Labor and Employment to ensure the indirectly, or through any employee, agent, contractor,
general welfare and protection of homeworkers and subcontractor; or any other person:
field personnel and the industries employing them. (1) delivers or causes to be delivered any goods,
Art. 154. Regulations of Secretary of Labor. The articles or materials to be processed or fabricated in or
regulations or orders to be issued pursuant to this about a home and thereafter to be returned or to be
Chapter shall be designed to assure the minimum disposed or distributed in accordance with his
terms and conditions of employment applicable to the direction; or
industrial homeworkers or field personnel involved. (2) sells any goods, articles or materials for the
Art. 155. Distribution of homework. For purposes of purpose of having such goods or articles process in or
this Chapter, the "employer" of homeworkers includes about a home and then repurchases them himself
any person, natural or artificial who, for his account or through another after such processing.
benefit, or on behalf of any person residing outside the p. Contractor or subcontractor means any
country, directly or indirectly, or through an employee, person who, for the account or benefit of an employer,
agent contractor, sub-contractor or any other person: delivers or causes to be delivered to a homeworker
1. Delivers, or causes to be delivered, any goods, goods or articles to be processed in or about his home
articles or materials to be processed or fabricated in or and thereafter to be returned, disposed of or
about a home and thereafter to be returned or to be distributed in accordance with the direction of the
disposed of or distributed in accordance with his employer.
directions; or q. Processing means manufacturing, fabricating,
2. Sells any goods, articles or materials to be finishing, repairing, altering, packing, wrapping or
processed or fabricated in or about a home and then handling in any way connected with the production or
Page 15 of 124
preparation of an article or material output rate or standard minimum rate in appropriate

orders for the particular work or processing to be
r. Cooperative is an association registered under
performed by the homeworkers.
the Cooperative Code of the Philippines
The standard output rates or piece rates shall be
s. Department means the Department of Labor
determined through any of the following procedures:
and Employment
a) time and motion studies
b) an individual / collective agreement between the
3. Registration employer and its workers as approved by the
Sec. 4 & 6 D.O. No. 5 Secretary or his authorized representative
Section 4 Registration of Homeworkers c) consultation with representatives of employers
Organization Any applicant homeworker organization and workers organization in a tripartite conference
or association shall acquire legal personality, and shall called by the Secretary.
be entitled to the rights and privilege granted by law to The time and motion studies shall be undertaken by
legitimate labor organizations upon issuance of the the Regional Office having jurisdiction over the location
certificate of registration based upon the following of the premise/s used regularly by the homeworker/s.
requirements: However, where the job operation or activity is being
a) Fifty-five pesos (P55.00) registration fee likewise performed by regular factory workers at the
factory or premises of the employer, the time and
b) The names of its officers, their addresses, the motion studies shall be conducted by the Regional
principal address of the homeworkers organization, the Office having jurisdiction over the location of the main
minutes of the organizational meetings and the list of undertaking or business of the employer. Piece rates
workers who participated in such meetings established through time and motion studies
c) The names of all its members compromising at conducted by the factory or main undertaking of the
least 20 percent of all workers in the bargaining unit employer shall be applicable to the homeworkers
where it seeks to operate, if applicable; performing the same job acitivity. The standard piece
rate shall be issued by the Regional office within one
d) If the applicant has been in existence for one or
month after a request has been made at the said
more years, copies of its annual financial reports; and
office.
e) Four copies of the constitution and by-laws of
Upon request of the Regional Office, the Bureau of
the applicant organization, the minutes of its adoption
Working Conditions shall provide assistance in the
or ratification and the list of members who participated
conduct of such studies.
in it
Non-compliance with the established standard rates
Section 6 - Payment for homework Immediately
can be the subject of complaint which shall be filed at
upon receipt of the finished goods or articles, the
the Regional Office.
employer shall pay the homeworker or the contractor
or subcontractor, as the case may be, for the worked Section 8 Deductions No employer, contractor, or
performed less corresponding homeworkers share of subcontractor shall make any deduction from the
SSS, MEDICARE and ECC premium contributions homeworkers earnings for the value of materials
which shall be remitted by the contractor / which have been lost, destroyed, soiled, or otherwise
subcontractor or employer to the SSS with the damaged unless the following conditions are met:
employers share. However, where payment is made to a) the homeworker concerned is clearly shown to
a contractor or subcontractor, the homeworker shall be responsible for the loss or damage
likewise be paid immediately after the goods or articles
have been collected from the workers. b) the homeworker is given reasonable opportunity
to show cause why deduction should not be made
c) the amount of such deduction is fair and
4. Conditions of Employment/Deductions reasonable and shall not exceed the actual loss or
damage; and
Sec. 7-9 D.O. No. 5
d) the deduction is made at such rate that the
Section 7 Standard Rates At the initiative of the
amount deducted does not exceed 20% of the
Department or upon petition of any interested party,
homeworkers earnings in a week.
the Secretary of Labor and Employment or his
authorized representative shall establish the standard Section 9 - Conditions for payment of work
Page 16 of 124
a) The employer may require the homeworker to Complaints for violations or labor standards and the
redo once the work which has been improperly terms and conditions of employment involving money
executed without having to pay the stipulated rate claims of homeworkers in an amount of not more than
again P5,000 per homeworker shall be heard and decided by
the Regional Director. He shall have the power to order
b) An employer, contractor, or subcontractor need
and administer, after due notice and hearing,
not pay the homeworker for any work which has been
compliance with the provision of this Rule.
done on goods and articles which have been returned
for reasons attributable to the fault of the homeworker. In cases where the findings of the Regional Office
shows that the money claims dues a homeworker
exceed P5,000, the same shall be endorsed to the
5. Joint and Several Liability of employer/contractor appropriate Regional Arbitration Branch of the National
Labor Relations Commission.
Sec. 11 D.O. No. 5
Non-compliance with the order issued by the Regional
Section 11 Duties of employer, contractor and Director can be the subject of prosecution in
subcontractor. Whenever an employer shall contract accordance with the penal provision of the Labor
with another for the performance of the employers Code.
work , it shall be the duty of such employer to provide
In cases of disagreement between the homeworker
in such contract that the employees or homeworkers of
and the employer, contractor, or subcontractor on a
the contractor and the latters subcontractor shall be
matter falling under this Rule, either party may refer
paid in accordance with the provisions in the Rule. In
the case to the Regional Office having jurisdiction over
the even that such contractor or subcontractor fails to
the workplace of the homeworker. The Regional Office
pay the wages or earnings of his employees or
shall decide the case within ten (10) working days from
homeworkers as specified in the Rule, such employer
receipt of the case. Its decision shall be final and
shall be jointly and severally liable with the contractor
executory.
or subcontractor to the workers of the latter, to the
extent that such work performed under such contract,
in the same manner as if the employees or
homeworkers were directly engaged by the employer. 9. Medical, Dental and Occupational Safety
The employer, contractor or subcontractor shall assist
the homeworkers in the maintenance of basic safe and
healthful working conditions at the homeworkers place 1. Coverage
of work.
Omnibus Rules, Book IV, Rule I, Sec. 1

6. Prohibitions This Rule shall apply to all employers, whether
operating for profit or not, including the Government
Sec. 13 D.O. No. 5
and any of its political subdivisions and government-
Section 13 Prohibitions for homewok. No owned or controlled corporations, which employs in
homework shall be performed on the following: (1) any workplace one or more workers.
explosives, fireworks and articles of like character; (2)
The development and enforcement of dental standards
drugs and poisons; and (3) other articles, the
shall continue to be under the responsibility of the
processing of which requires exposure to toxic
Bureau of Dental Health Services of the Department of
substances.
Health.
7. Enforcement
Sec. 10 D.O. No. 5 2. First Aid Treatment
Section 10 Enforcement Power The Regional Art. 156. First-aid treatment. Every employer shall
Director shall have the power to order and administer keep in his establishment such first-aid medicines and
compliance with the provisions of the law and equipment as the nature and conditions of work may
regulations affecting the terms and conditions of require, in accordance with such regulations as the
employment of home workers and shall have the Department of Labor and Employment shall prescribe.
jurisdiction in cases involving violation of the Rule.
Page 17 of 124
The employer shall take steps for the training of a which case, the services of a graduate first-aider shall
sufficient number of employees in first-aid treatment be provided for the protection of workers, where no
registered nurse is available. The Secretary of Labor
Omnibus Rules, Book IV, Rule I, Secs. 2-3 and Employment shall provide by appropriate
SECTION 2. Definitions. As used in this Rule, the regulations, the services that shall be required where
following terms shall have the meanings indicated the number of employees does not exceed fifty (50)
hereunder unless the context clearly indicates and shall determine by appropriate order, hazardous
otherwise: workplaces for purposes of this Article;
(a) "First-aid treatment" means adequate, immediate

and necessary medical and dental attention or remedy b. The services of a full-time registered nurse, a
given in case of injury or sudden illness suffered by a part-time physician and dentist, and an emergency
worker during employment, irrespective of whether or clinic, when the number of employees exceeds two
not such injury or illness is work-connected, before hundred (200) but not more than three hundred (300);
more extensive medical and/or dental treatment can and
be secured. It does not include continued treatment or
follow-up treatment for an injury or illness. c. The services of a full-time physician, dentist and
(b) "Work place" means the office, premises or work a full-time registered nurse as well as a dental clinic
site where the workers are habitually employed and and an infirmary or emergency hospital with one bed
shall include the office or place where the workers who capacity for every one hundred (100) employees when
have no fixed or definite work site regularly report for the number of employees exceeds three hundred
assignment in the course of their employment. (300).
(c) "First-aider" means any person trained and duly

certified as qualified to administer first aid by the In cases of hazardous workplaces, no employer shall
Philippine National Red Cross or by any other engage the services of a physician or a dentist who
organization accredited by the former. cannot stay in the premises of the establishment for at
SECTION 3. Medicines and facilities. Every least two (2) hours, in the case of those engaged on
employer shall keep in or about his work place the part-time basis, and not less than eight (8) hours, in
first-aid medicines, equipment and facilities that shall the case of those employed on full-time basis. Where
be prescribed by the Department of Labor and the undertaking is non-hazardous in nature, the
Employment within 5 days from the issuance of these physician and dentist may be engaged on retainer
regulations. The list of medicines, equipment and basis, subject to such regulations as the Secretary of
facilities may be revised from time to time by the Labor and Employment may prescribe to insure
Bureau of Working Conditions, subject to the approval immediate availability of medical and dental treatment
of the Secretary of Labor and Employment. and attendance in case of emergency.
3. Emergency Medical and Dental Services

Omnibus Rules, Book IV, Rule I, Sec. 4
Emergency medical and dental services. Any
a. When required employer covered by this Rule shall provide his
employees medical and dental services and facilities in
the following cases and manner:
Art. 157. Emergency medical and dental services. It
(a) When the number of workers is from 10 to 50 in a
shall be the duty of every employer to furnish his
work place, the services of a graduate first-aider shall
employees in any locality with free medical and dental
be provided who may be one of the workers in the
attendance and facilities consisting of:
work place and who has immediate access to the first-
aid medicines prescribed in Section 3 of this Rule.
(b) Where the number of workers exceeds 50 but not
more than 200, the services of a full-time registered
a. The services of a full-time registered nurse when
nurse shall be provided. However, if the work place is
the number of employees exceeds fifty (50) but not
non-hazardous, the services of a full-time first-aider
more than two hundred (200) except when the
may be provided if a nurse is not available.
employer does not maintain hazardous workplaces, in
Page 18 of 124
(c) Where the number of workers in a work place medical practitioners so engaged be actually hired as
exceeds 200 but not more than 300, the services of a employees. It only requires the employer to retain,
full-time registered nurse, a part-time physician and a not employ. (Global Communications vs. De Vera)
part-time dentist, and an emergency clinic shall be
provided, regardless of the nature of the undertaking Shangri-la, which employs more than 200 workers, is
therein. The physician and dentist engaged for such mandated to furnish or provide or make available
work place shall stay in the premises for at least two such medical and allied services to its employees, not
(2) hours a day; Provided, However, that where the necessarily to hire or employ a service provider.
establishment has more than one (1) work shift a day,
the required two-hour stay shall be devoted to the work The term full-time in Art. 157 cannot be construed as
shift which has the biggest number of workers and referring to the type of employment referred to in Art
they shall, in addition to the requirements of this Rule, 280 (distinguishing the 2 kinds of employees: regular
be subject to call at any time during the other work and casual)
shifts to attend to emergency cases.
The phrase services of a full-time registered nurse
(d) Where the number of workers in a hazardous work
should be taken to refer to the kind of services that the
place exceeds 300, the services of a full-time nurse, a
nurse will render in the companys premises and to its
full-time physician, a full-time dentist, a dental clinic
employees, not the manner of his engagement.
and an infirmary or emergency hospital with one-bed
capacity for every 100 workers shall be provided. The
physician and dentist shall stay in the premises of the
b. When not required
work place for at least eight (8) hours a day; Provided,
However, that where the work place has more than
one (1) work shift a day, they shall be at work place
during the work shift which has the biggest number of Art. 158. When emergency hospital not required.
workers and they shall be subject to call at anytime The requirement for an emergency hospital or dental
during the other work shifts to attend to emergency clinic shall not be applicable in case there is a hospital
cases. Where the undertaking in such a work place is or dental clinic which is accessible from the employers
non-hazardous in nature, the employer may engage establishment and he makes arrangement for the
the services of a part-time physician and a part-time reservation therein of the necessary beds and dental
dentist who shall have the same responsibilities as facilities for the use of his employees.
those provided in sub-section (c) of this Section, and
shall engage the services of a full-time registered
nurse.
(e) In all work places where there are more than one Omnibus Rules, Book IV, Rule I, Sec. 5
(1) work shift in a day, the employer shall, in addition to Emergency hospital. An employer need not put up
the requirements of this Rule, provide the services of a an emergency hospital or dental clinic in the work
full-time first-aider for each workshift. place as required in these regulations where there is a
hospital or dental clinic which is not more than five (5)
kilometers away from the work place if situated in any
ESCASINAS v SHANGRI-LAS MACTAN ISLAND urban area or which can be reached by motor vehicle
RESORT in twenty-five (25) minutes of travel, if situated in a
rural area and the employer has facilities readily
available for transporting a worker to the hospital or
Petitioners were registered nurses engaged by Dr. clinic in case of emergency: Provided, That the
Pepito to work for clinic, at Shangri-las Mactan Island employer shall enter into a written contract with the
Resort in Cebu where she was a retained physician. hospital or dental clinic for the use thereof in the
They claim that they are regular employees of treatment of workers in case of emergency.
Shangri-la.
Art. 157 does NOT require the engagement of full-time

nurses as regular employees of a company While it is 4. Employer Assistance Obligation
true that the provision requires employers to engage
the services of medical practitioners in certain
establishments depending on the number of their
Art. 161. Assistance of employer. It shall be the duty
employees, nothing is there in the law which says that
of any employer to provide all the necessary
Page 19 of 124
assistance to ensure the adequate and immediate personnel.

medical and dental attendance and treatment to an
injured or sick employee in case of emergency.
Omnibus Rules, Book IV, Rule I

5. Occupational Safety and Health Standards, Training SECTION 6. Training and qualifications of medical and
of supervisor/technology dental personnel. The health personnel required to
be hired by an employer pursuant to the Code and
these Rules shall have the following minimum
a. When required qualifications:
(a) A first-aider must be able to read and write and
must have completed a course in first-aid duly certified
Omnibus Rules, Book IV, Rule II, Secs. 5 (a) (d) by the National Red Cross or any other organization
accredited by the same.
Training of personnel in safety and health. Every
employer shall take steps to train a sufficient number (b) A nurse must have passed the examination given
of his supervisors or technical personnel in by the Board of Examiners and duly licensed to
occupational safety and health. An employer may practice nursing in the Philippines and preferably with
observe the following guidelines in the training of his at least fifty (50) hours of training in occupational
personnel: nursing conducted by the Department of Health, the
Institute of Public Health of the University of the
(a) In every non-hazardous establishment or
Philippines or by any organization accredited by the
workplace having from fifty (50) to four hundred (400)
former.
workers each shift, at least one of the supervisors or
technical personnel shall be trained in occupational (c) A physician, whether permanent or part-time, must
health and safety and shall be assigned as part-time have passed the examinations given by the Board of
safety man. Such safety man shall be the secretary of Examiners for physicians, is licensed to practice
the safety committee. medicine in the Philippines, and is preferably a
graduate of a training course in occupational medicine
(d) In every hazardous establishment or workplace
conducted by the Bureau of Working Conditions, the
having over two hundred (200) workers each shift, at
Institute of Public Health of the University of the
least two of its supervisors or technical personnel shall
Philippines or any organization duly accredited by the
be trained and one of them shall be appointed full-time
former.
safety man and secretary of the safety committee
therein. (d) A dentist, whether permanent or part-time, must
have passed the examinations given by the Board of
Examiners for dentists, is licensed to practice dentistry
Art. 159. Health program. The physician engaged by in the Philippines, and preferably has completed a
an employer shall, in addition to his duties under this training course in occupational dentistry conducted by
Chapter, develop and implement a comprehensive the Bureau of Dental Health Services of the
occupational health program for the benefit of the Department of Health or any organization duly
employees of his employer. accredited by the former.
SECTION 7. Opportunity for training. Nurses,
physicians, and dentists employed by covered
employers on the date the Code becomes effective
Art. 160. Qualifications of health personnel. The and who do not possess the special training
physicians, dentists and nurses employed by qualifications provided in this Rule may attend the
employers pursuant to this Chapter shall have the respective training courses pertinent to their field of
necessary training in industrial medicine and specialization. The Bureau of Working Conditions shall
occupational safety and health. The Secretary of Labor initiate the organization and carrying out of appropriate
and Employment, in consultation with industrial, training programs for nurses, physicians and dentists
medical, and occupational safety and health in coordination with the government agencies or
associations, shall establish the qualifications, criteria private organizations referred to in the preceding
and conditions of employment of such health Section.
SECTION 8. Hazardous work places. The Bureau
Page 20 of 124
of Working Conditions, shall, with the approval of the b. When not required
Secretary of Labor and Employment, issue from time
to time a detailed list of hazardous work places for
purposes of this Rule, in addition to the following: Omnibus Rules, Book IV, Rule II, Sec. 5 (e)
(a) Where the nature of the work exposes the workers (e) The employment of a full-time safety man not be
to dangerous environmental elements, contaminations required where the employer enters into a written
or work conditions including ionizing radiations, contract with a qualified consulting organization which
chemicals, fire, flammable substances, noxious shall develop and carry out his safety and health
components and the like. activities; Provided, That the consultant shall conduct
(b) Where the workers are engaged in construction plant visits at least four (4) hours a week and is subject
work, logging, fire-fighting, mining, quarrying, blasting, to call anytime to conduct accident investigations and
stevedoring, dock work, deep-sea fishing and is available during scheduled inspections or surveys by
mechanized farming. the Secretary of Labor and Employment or his
authorized representatives.
(c) Where the workers are engaged in the manufacture
or handling of explosives and other pyrotechnic
products. 6. Enforcement/DOLE obligations
(d) Where the workers use or are exposed to heavy or
power-driven machinery or equipment.
(e) Where the workers use or are exposed to power- Art. 162. Safety and health standards. The
driven tools. Secretary of Labor and Employment shall, by
appropriate orders, set and enforce mandatory
SECTION 9. Health program. The physician occupational safety and health standards to eliminate
engaged by an employer pursuant to this Rule shall, in or reduce occupational safety and health hazards in all
addition to providing medical services to the workers in workplaces and institute new, and update existing,
cases of emergency, perform among others, the programs to ensure safe and healthful working
following duties: conditions in all places of employment.
(a) Conduct pre-employment medical examination,
free of charge, for the proper selection and placement
of workers;
(b) Conduct free of charge annual physical Art. 163. Research. It shall be the responsibility of the
examination of the workers; Department of Labor and Employment to conduct
continuing studies and research to develop innovative
(c) Collaborate closely with the safety and technical methods, techniques and approaches for dealing with
personnel of the establishment to assure selection and occupational safety and health problems; to discover
placement of workers from the standpoint of physical, latent diseases by establishing causal connections
mental, physiological and psychological suitability, between diseases and work in environmental
including investigation of accidents where the probable conditions; and to develop medical criteria which will
causes are exposure to occupational health hazards; assure insofar as practicable that no employee will
and suffer impairment or diminution in health, functional
(d) Develop and implement a comprehensive capacity, or life expectancy as a result of his work and
occupational health program for the employees of the working conditions.
establishment. A report shall be submitted annually to
the Bureau of Working Conditions describing the
program established and the implementation thereof.
SECTION 10. Medical and dental records. (a) The Art. 164. Training programs. The Department of
employer shall furnish the Bureau of Working Labor and Employment shall develop and implement
Conditions with copies of all contracts of employment training programs to increase the number and
of medical personnel and contracts with hospitals or competence of personnel in the field of occupational
clinics as provided in Section 5 of this Rule. safety and industrial health.
(b) The employer shall maintain a record of all medical
examinations, treatments and medical activities
undertaken.
(c) The employer shall submit reports in such form,
Page 21 of 124
Art. 165. Administration of safety and health laws.
a. The Department of Labor and Employment shall

be solely responsible for the administration and
enforcement of occupational safety and health laws,
regulations and standards in all establishments and
workplaces wherever they may be located; however,
chartered cities may be allowed to conduct industrial
safety inspections of establishments within their
respective jurisdictions where they have adequate
facilities and competent personnel for the purpose as
determined by the Department of Labor and
Employment and subject to national standards
established by the latter.
b. The Secretary of Labor and Employment may,

through appropriate regulations, collect reasonable
fees for the inspection of steam boilers, pressure
vessels and pipings and electrical installations, the test
and approval for safe use of materials, equipment and
other safety devices and the approval of plans for such
materials, equipment and devices. The fee so
collected shall be deposited in the national treasury to
the credit of the occupational safety and health fund
and shall be expended exclusively for the
administration and enforcement of safety and other
labor laws administered by the Department of Labor
and Employment.
Omnibus Rules, Book IV, Rule II, Sec 8

Administration and enforcement. (a) Every
employer shall give to the Secretary of Labor and
Employment or his duly authorized representative
access to its premises and records at any time of the
day and night when there is work being undertaken
therein for the purpose of determining compliance with
the provisions of this Rule.
(b) Every establishment or workplace shall be
inspected at least once a year to determine
compliance with the provisions of this Rule. Special
inspection visits, however, may be authorized by the
Regional Office to investigate accidents, conduct
surveys requested by the Bureau of Working
Conditions, follow-up inspection, recommendations or
to conduct investigations or inspections upon request
of an employer, worker or a labor union in the
establishment.
Note: Arts. 166-208; repealed by SSS Law of 1997;

Re: Art. 209, see NHI Law 166-208; Book IV, Rule II,
Sec. 8. (Please see Appendix for SSS Law of 1997)
Page 22 of 124
III. EMPLOYEE CLASSIFICATION a regular employee.
1. Coverage
a. Employer Recognition
Art. 278. Coverage. The provisions of this Title shall

apply to all establishments or undertakings, whether ROMARES V. NLRC
for profit or not. Romares was hired 3 times, each instance lasting for 5
months. In all these engagements, Romares was
assigned at the same department performing
2. Employee Classification maintenance work.
Art. 280. Regular and casual employment. The Was Romares a regular or a contractual employee?
provisions of written agreement to the contrary Regular.
notwithstanding and regardless of the oral agreement
Under Art. 280, there are 2 kinds of regular employees
of the parties, an employment shall be deemed to be
regular where the employee has been engaged to (1) those engaged to perform activities which are
perform activities which are usually necessary or necessary or desirable in the usual business or trade
desirable in the usual business or trade of the of ER and (2) those casual employees who have
employer, except where the employment has been rendered atleast one year of service, whether
fixed for a specific project or undertaking the continuous or broken, with respect to the activity in
completion or termination of which has been which they are employed. Romares employments falls
determined at the time of the engagement of the
employee or where the work or service to be under the 1st kind as his work was necessary and
performed is seasonal in nature and the employment is desirable; fact of his hiring and rehiring for a total
for the duration of the season. period of 15 months indicate the continuing need for
his services.
Granting arguendo that Romares was a temporary EE,
the fact that he worked for more than a year with the
An employment shall be deemed to be casual if it is
company had converted his employment into a regular
not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one one pursuant to Art. 280 (2).
year of service, whether such service is continuous or
broken, shall be considered a regular employee with
respect to the activity in which he is employed and his b. Employer Determination/Designation
employment shall continue while such activity exists.
PHIL. FEDERATION, ETC. V. NLRC (DECEMBER 11,

1998)
Art. 281. Probationary employment. Probationary Employee hired on probationary status. She was then
employment shall not exceed six (6) months from the rehired for a period of 1 year. After the 1 year period
date the employee started working, unless it is covered
she was terminated.
by an apprenticeship agreement stipulating a longer
period. The services of an employee who has been The contract here was clearly one of probation and
engaged on a probationary basis may be terminated when the 6 month period lapsed and she was hired for
for a just cause or when he fails to qualify as a regular another 1 year contract she had already become a
employee in accordance with reasonable standards
regular employee.
made known by the employer to the employee at the
time of his engagement. An employee who is allowed The court cited 1702 and the idea that in case of doubt
to work after a probationary period shall be considered one should rule in favor of labor.
c. Management Prerogative
Page 23 of 124
respect to the activity in which he is employed and his

employment shall continue while such activity exists.
A. Regular Employees
(c) An employee who is allowed to work after a

Who may be considered regular employees? probationary period shall be considered a regular
a. Art. 280, 1st par: an employment shall be deemed employee.
to be regular where the employee has been engaged
to perform activities which are usually necessary or
desirable in the usual business or trade of the 1. Nature of Work
employer
POSEIDON FISHING v. NLRC
nd
b. Art. 280, 2 par: any employee who has rendered
at least one year of service, whether such service is
continuous or broken, shall be considered a regular Petitioner Poseidon Fishing is a fishing company
employee with respect to the activity in which he is engaged in the deep-sea fishing industry. Its various
employed vessels catch fish in the outlying islands of the
Philippines, which are traded and sold at the Navotas
Fish Port. One of its boat crew was private respondent
c. Art. 281, last sentence: An employee who is
Jimmy S. Estoquia.
allowed to work after a probationary period shall be
considered a regular employee. In 1999, petitioners, without reason, demoted
respondent from Boat Captain to Radio Operator of
petitioner Poseidon.
d. Art 75(d): All learners who have been allowed or
suffered to work during the first two (2) months shall Petitioners Poseidon and Terry de Jesus strongly
be deemed regular employees if training is terminated asserted that private respondent was a contractual or
by the employer before the end of the stipulated a casual employee whose services could be
period through no fault of the learners
terminated at the end of the contract even without a
just or authorized cause in view of Article 280 of the
Omnibus Riles, Book VI, Rule I, Secs. 5(a), (b) & 6 Labor Code
WoN private respondent was a regular employee at
SECTION 5. Regular and casual employment. (a) the time of termination
The provisions of written agreements to the contrary
notwithstanding and regardless of the oral agreements
of the parties, an employment shall be considered to Yes. Jimmy is not a casual employee
be regular employment for purposes of Book VI of the
Article 280 of the Labor Code clearly appears to have
Labor Code where the employee has been engaged to
been, as already observed, to prevent circumvention
perform activities which are usually necessary or
of the employees right to be secure in his tenure, the
desirable in the usual business or trade of the
clause in said article indiscriminately and completely
employer except where the employment has been
ruling out all written or oral agreements conflicting
fixed for a specific project or undertaking the
with the concept of regular employment as defined
completion or termination of which has been
therein should be construed to refer to the
determined at the time of the engagement of the
substantive evil that the Code itself has singled out:
employee or where the work or service to be
agreements entered into precisely to circumvent
performed is seasonal in nature and the employment is
security of tenure.
for the duration of the season.
(b) Employment shall be deemed as casual in nature if

it is not covered by the preceding paragraph; Provided, EDDIE PACQUING v COCA-COLA
That any employee who has rendered at least one
not, shall be considered a regular employee with
Page 24 of 124
Seven cargadores-pahinantes of Coca-Cola

Philippines filed a complaint for against respondent for
unfair labor practice and illegal dismissal. They seek to DE LA CRUZ V. MAERSK FILIPINAS CREWING
be declared regular employees. They had contracts of
employment for a certain number of months but were
repeatedly re-hired. All of them worked for more than a Dela Cruz, a seaman, was dismissed because of the
year with the company. logbook entries written by the Chief Engr. that he has
not been able to live up to the companys job
description.
Respondent countered that petitioners were temporary
workers who were engaged for a five-month period to
act as substitutes for an absent regular employee. Seafarers are not covered by the term regular
employment as defined under Art 280 of LC. They are
considered contractual employees whose rights and
Coca-Cola Bottlers Phils., Inc., is one of the leading obligations are covered by the POEA Standard
and largest manufacturers of softdrinks in the country. Employment Contract for Filipino Seamen, the Rules
Respondent workers have long been in the service of and Regulations Governing Overseas Employment,
petitioner company. Respondent workers, when hired, and RA 8042 (The Migrant Workers and Overseas
would go with route salesmen on board delivery trucks Filipinos Act of 1995). In using the term probationary
and undertake the laborious task of loading and and permanent vis--vis seafarers, what was really
unloading softdrink products of petitioner company to meant was eligible for re-hire. In no case shall the
its various delivery points. contract of employment of seamen exceed 12 months.
Although the work to be performed is only for a It is an accepted maritime industry practice that
specific project or seasonal, where a person thus employment of seafarers is for a fixed period only.
engaged has been performing the job for at least one They cannot stay for a long and indefinite period of
year, even if the performance is not continuous or is time at sea as limited access to shore activity during
merely intermittent, the law deems the repeated and their employment has been shown to adversely affect
continuing need for its performance as being sufficient them.
to indicate the necessity or desirability of that activity 2. Extended Period
to the business or trade of the employer. The
employment of such person is also then deemed to be
regular with respect to such activity and while such TOMAS LAO CONSTRUCTION v. NLRC (1997)
activity exists.
Private respondents worked for various periods as
construction workers in different capacities. According
The argument of the respondent regarding the post to them, they alternately worked for three separate
production character of the job of the petitioners is also
entities under the Lao Group of Companies.
untenable. If, as so argued by respondent company,
only those whose work are directly involved in the Subsequently, the Managing Director issued a
production of softdrinks may be held performing memorandum which required all employees to sign
functions necessary and desirable in its usual employment contract forms and clearances. To
business or trade, there would have then been no
ensure compliance, the company ordered the
need for it to even maintain regular truck sales route
helpers. The nature of the work performed must be withholding of the salary of any employee who refused
viewed from a perspective of the business or trade in to sign. The contracts expressly described the
its entirety and not on a confined scope. construction workers as project employees whose
employments were for a definite period, i.e., upon the
expiration of the contract period or the completion of
A contract of employment is impressed with public
the project for which the workers was hired.
interest. The provisions of applicable statutes are
deemed written into the contract, and "the parties are Complainants herein refused to sign contending that
not at liberty to insulate themselves and their this scheme was designed by their employer to
relationships from the impact of labor laws and downgrade their status from regular employees to
regulations by simply contracting with each other mere project employees. As a result, their salaries
Page 25 of 124
were withheld and later on, their services were of the necessity if not indispensability of that
terminated. activity to the business. Hence, employment is
regular, but only with respect to such activity
WON private respondent are regular employees (vis--
and while such activity exists.
vis project employees)
YES, respondents are regular employees. While it Handicapped persons may become regular if
may be allowed that in the instant case the workers they are doing necessary or desirable jobs
were initially hired for specific projects or undertakings and their employment has exceeded six
of the company and hence can be classified as project months through renewals of the initial
employees, the repeated re-hiring and the continuing appointment. The renewals show that they are
need for their services over a long span of time (at qualified for their positions and should be
least seven years) have undeniably made them treated like other qualified able-bodied
regular employees employees.
The principal test in determining whether particular

employees are "project employees" distinguished from BETA ELECTRONIC CORP. v. NLRC
"regular employees" is whether the "project
employees" are assigned to carry out "specific project
or undertaking," the duration (and scope) of which are The private respondent was a typist-clerk and her
specified at the time the employees are engaged for contract was extended several times.
the project.
"Project" in the realm of business and industry refers The Court held that she was a probationary employee,
to a particular job or undertaking that is within the who became regular upon the expiration of six months.
regular or usual business of employer, but which is Under Art 281 of the LC, a probationary employee is
distinct and separate and identifiable as such from the considered a regular employee if he has been
undertakings of the company. Such job or undertaking allowed to work after the probationary period. The
begins and ends at determined or determinable times. fact that her employment has been a contract-to-
3. Repeated Renewal of Contract contract basis cannot alter the character of
employment, because contracts cannot override the
mandate of law. Hence, by operation of law, she has
AZUCENA become a regular employee.
What determines regularity or casualness is
NOT the employment contract, but the nature B. Project Employees
of the job.
Primary standard is the reasonable connection
between the particular activity performed by Art. 280. Regular and casual employment. The
provisions of written agreement to the contrary
the employee in relation to the usual business
notwithstanding and regardless of the oral agreement
or trade of the employer. The connection may of the parties, an employment shall be deemed to be
be determined by considering the nature of the regular where the employee has been engaged to
work performed in relation to the scheme of perform activities which are usually necessary or
the particular business or trade in its entirety. desirable in the usual business or trade of the
employer, except where the employment has been
Those who have rendered at least one year of fixed for a specific project or undertaking the
service, whether continuous or broken, with completion or termination of which has been
respect to the activity in which they are determined at the time of the engagement of the
employed, are also regular employees. employee or where the work or service to be
performed is seasonal in nature and the employment is
The law deems the repeated and continuing for the duration of the season.
need of its performance as sufficient evidence
Page 26 of 124
HANJIN draws the workers to be dispatched to its

various construction projects. Among the various
D.O. No. 19 of 1993 GUIDELINES GOVERNING THE construction projects to which they were supposedly
EMPLOYMENT OF WORKERS IN THE assigned, respondents named the North Harbor
CONSTRUCTION INDUSTRY project in 1992-1994; Manila International Port in
1994-1996; Batangas Port in 1996-1998; the Batangas
Pier, and La Mesa Dam. At the time Hanjin dismissed
Section 1 Coverage
respondents from employment. Respondents claimed
This issuance shall apply to all operation and that HANJIN had several construction projects that
undertakings in the construction industry and its were still in progress, such as Metro Rail Transit
subdivisions, namely general building construction and (MRT) II and MRT III, and continued to hire employees
special trade construction based on the classification to fill the positions vacated by the respondents
code of the Philippine Construction Accreditation
Board of the Construction Industry Authority of the
Philippines; to companies and entities involved in Respondents were regular employees and hence
demolition works; and to those falling within the illegally dismissed and entitled to backwages and
construction industry as determined by the Secretary reinstatement or separation pay.
of Labor and Employment. Respondents were regular employees.
Section 2 Employment Status The Court cited Article 280. Proceeding from
Classification of employees- The employees in the this, the Court pointed out that the test to determine
construction industry are generally categorized as a) whether or not an employee is regular or a project
project employees and b) non-project employees. employee is whether or not the project employees
Project employees are those employed in connection were assigned to carry out a "specific project or
with a particular construction project or phase thereof undertaking," the duration and scope of which
and those whose employment is co-terminus with each were specified at the time the employees were
project to which they are assigned. engaged for that project. The Court notes that from
jurisprudence, the rule is that length of service or the
re-hiring of construction workers on a project-to-project
Non-project employees, on the other hand, are those basis does not confer upon them regular employment
employed without reference to any particular status, since their re-hiring is only a natural
construction project or phase of a project. consequence of the fact that experienced construction
workers are preferred. Employees who are hired for
carrying out a separate job, distinct from the other
undertakings of the company, the scope and duration
of which has been determined and made known to the
employees at the time of the employment, are properly
treated as project employees and their services may
be lawfully terminated upon the completion of a
project. Should the terms of their employment fail to
comply with this standard, they cannot be considered
project employees. The Court markedly stressed the
1. Definition importance of the employees' knowing consent to
being engaged as project employees when it clarified
that "there is no question that stipulation on
HANJIN HEAVY INDUSTRIES & CONST. CO v. employment contract providing for a fixed period of
IBAES employment such as `project-to-project' contract is
valid provided the period was agreed upon
Respondents herein were workers dismissed by knowingly and voluntarily by the parties, without
Hanjin Heavy Industries and Construction Co. They any force, duress or improper pressure being
filed a complaint with NLRC for illegal dismissal, brought to bear upon the employee and absent
reinstatement, and full backwages. they alleged that any other circumstances vitiating his consent.
their tasks were usual and necessary or desirable in
the usual business or trade of HANJIN and that they
were employed as members of a work pool from which 2. Project Employment
Page 27 of 124
operation and the unsuitability of raw materials, this

experimental project was stopped after four or five
UY V. NLRC (1996)
ships had been chopped. When the project was
completely phased out in November 1986, the laborers
The eight private respondents were masons, laborers, hired for said project were terminated.
and carpenters of Uy, a private contractor engaged in WoN workers contracted as project employees may be
construction business. The respondents filed cases of considered as regular employees on account of their
illegal dismissal against Uy who claims the performance of duties inherent in the business of the
respondents were merely project employees paid on a employer.
pakyaw basis. In fact, says Uy, they were free to find
No, they may not. A project employment terminates
other jobs after completion of a project.
as soon as the project is completed. Thus an employer
is allowed by law to reduce the work force into a
WON respondents were project employees? NO. number suited for the remaining work to be done upon
the completion or proximate accomplishment of the
project. However, the law requires that, upon
Project employees are those workers hired for a completion of the project, the employer must present
specific project or undertaking the completion of which proof of termination of the services of the project
has been determined at the time of the engagement of employees at the nearest public employment office.
the employee (Art. 280). Uy has not proven that the This is specially provided for as regards construction
respondents were employed for any specific project. In workers obviously to obviate indiscriminate termination
fact, the respondents worked for Uy continuously for of employment in derogation of the workers right to
several years and they performed work necessary and security of tenure. After the termination of the project,
desirable in Uys business. They are thus regular an employer may wind up its operations only to
employees. complete the project. In such a case, the remaining
employees do not necessarily lose their status as
project employees. However, if the employees
The respondents also fall squarely within the services are extended long after the supposed project
provisions of Policy Instructions No. 20, which had been completed, the employees are removed from
governed employer-employee relations in the the scope of project employees and they shall be
construction industry at that time. Because considered regular employees.
respondents were employed by Uy without reference
to any particular construction project and belonged to The fact that petitioners worked for NSC under
a work pool from which Uy, in his discretion, drew different project employment contracts for several
workers for assignment to his various projects, the years cannot be made basis to consider them a
private respondents are NOT project employees. regular employees, for they remain project employees
regardless of the number of projects in which they
have worked
VILLA v. NLRC
Villa was employed with the National Steel Corporation
(NSC) which embarked on a Five-Year Expansion
Program. The NSC then had problems with the union
of its employees which charged the NSC with unfair 3. Application of Rule in Non-Construction
labor practices which included the allegation of (c) Industries
nonregularization of contractual employees, (d) illegal
termination of employees, among others. In line with
its program to use 100% scrap, the NSC ventured into AZUCENA
a shipbreaking operation. However, due to scarcity of
vessels/ships for salvaging, the higher costs of
Page 28 of 124
Project employment is coterminous with the merely serves as a badge of regular

project for which the employee was hired. It employment.
may be terminated when the project ends.
In contrast, regular employment continues MARAGUINOT, JR v. NLRC
until it is terminated by a just or authorized
cause.
The petitioners were part of the filming crew of the
Regular employment exists for an indefinite private respondent. When they requested that their
length of time; project employment exists for a salary be increased to comply with the minimum wage,
definite, predefined period. they were dismissed by the private respondent,
alleging that they were project employees.
For project employment contracts to be valid,
the employees assignment to a specific
project must be made in good faith and not as A project employee or a member of a work pool may
a means of evading applicable requirements acquire the status of a regular employee as held in
Tomas Lao et. al. v. NLRC, when the following concur:
of labor laws.
a. There is a continuous rehiring of project
Employers have no obligation to pay project employees even after cessation of a
employees separation pay. Regular project;
employees are legally entitled to separation
b. The tasks performed by the alleged
pay, except if dismissed for just cause. "project employee" are vital, necessary
Project or contract workers are not considered and indispensable to the usual business or
trade of the employer.
regular because their services are needed
only when there are projects to be undertaken. The length of time during which the employee was
The rationale is that if a project has already continuously re-hired is not controlling, but merely
serves as a badge of regular employment.
been completed, it would be unjust to require
employer to maintain said employees in the While Lao admittedly involved the construction
payroll while they are doing absolutely nothing industry, to which Policy Instruction No. 20/Department
Order No. 19 regarding work pools specifically applies,
except waiting until another project is begun.
there seems to be no impediment to applying the
However, members of a work pool from which underlying principles to industries other than the
a construction company draws its project construction industry. Neither may it be argued that a
employees, if considered employee of the substantial distinction exists between the projects
undertaken in the construction industry and the motion
construction company while in the work pool, picture industry. On the contrary, the raison d' etre of
are nonproject employees. If they are both industries concern projects with a foreseeable
employed in a particular project, the suspension of work.
completion of the project or any phase will
NOT mean severance of employer-employee
relationship (Policy Instructions No. 20). C. Casual Employees
While length of time is not a controlling test for Art. 280. Regular and casual employment.
project employment, it can be a strong factor
in determining whether the employee was An employment shall be deemed to be casual if it is
hired for a specific undertaking or in fact not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one
tasked to perform functions which are
necessary and indispensable to the usual broken, shall be considered a regular employee with
business or trade of the employer. respect to the activity in which he is employed and his
Length of time during which employee was employment shall continue while such activity exists.
continuously re-hired is not controlling, but
Page 29 of 124
Omnibus Rules, Book VI, Rule 1, Sec. 5(b) continuously or not, he becomes a regular
employee.
Employment shall be deemed as casual in nature if it
But he is uniquely regular because that status
is not covered by the preceding paragraph; Provided,
That any employee who has rendered at least one attaches only for the particular activity that he
year of service, whether such service is continuous or was doing when still a casual. He gains the
not, shall be considered a regular employee with right to security of tenure with respect to such
respect to the activity in which he is employed and his activity.
employment shall continue while such activity exists
Employment is casual when it is irregular,
unpredictable, sporadic and brief in nature,
and outside the usual business of the
1. Nature of Work employer. The work is not permanent but
occasional or by chance.
MARANAW HOTELS vs. CA Despite the distinction between regular and
Oabel was hired by petitioner as an extra beverage casual employment, every employer is still
attendant. Petitioner contracted with MANRED and entitled to the rights and privileges granted by
Oabel was subsequently transferred there. He was law to regular employees during the period of
fired a few days after he filed a petition for their actual employment.
regularization.
Oabel is deemed a regular employee of petitioner, not TABAS v. CALIFORNIA MANUFACTURING CO. INC.
of MANRED.
(1) Oabel was hired by petitioner before her services
Petitioners were employees of Livi which assigned the
were transferred to MANRED. The service agreement
between petitioner and MANRED is a mere ploy to petitioners to California to work as promotional
circumvent the law on employment pertaining to merchandisers by virtue of a Manpower Supply
regularization; (2) Petitioner exercises control over Agreement. Petitioners were made to sign
private respondent Oabel and determines the nature of employment contracts with durations of 6 months;
her tasks; (3) The operations of the hotel itself do not upon expiration of said contracts, they signed new
cease with the end of each event or function and there agreements for the same period. Petitioners services
is an ever-present need for individuals to perform
were terminated due to retrenchment. It was found
certain tasks necessary to petitioners business.
Thus, although the tasks may vary, the need for however that the retrenchment was without sufficient
sufficient manpower to carry them out does not; (4) basis.
MANRED is a labor-only contractor. Oabels real Are petitioners casual or regular employees? Regular.
employer is petitioner.
Under Art. 280 (2), petitioners had become regular
employees as they have rendered at least one year of
Also, as Oabel has already rendered more than one service, and hence cannot be separated without due
year of service to petitioner, for the period of 1995-
process. Given that the retrenchment was invalid,
1998, she must already be considered a regular
employee, pursuant to Art. 280, LC. petitioners were in fact dismissed without cause hence
entitled to the benefits awarded to regular employees.
2. One Year Service

MERCADO vs. NLRC
According to petitioners, they were agricultural workers
AZUCENA:
utilized by private respondents in all phases of work on
Casual employee is casual only for one year. If
he has worked for at least one year, whether
Page 30 of 124
the latters land and had been working thereon for a as void ab initio for being contrary to public
number of years. policy and morals.
Petitioners are seasonal employees1. The nature of Seafarers are contractual employees. Their
their work reveals that petitioners were required to employment is governed by the POEA
perform phases of agricultural work for a definite Standard Employment Contract. Their
period of time after which their services would be
employment terminates when the contract
available to any other farm owner. Employment ends
upon completion of project or season. The Court found expires. When it does, they are not entitled to
it hard to believe petitioners worked continuously the separation pay since their employment is
whole year round for 12 hours a day, as the planting of contractually fixed for a certain period of time.
rice and sugar cane does not entail a whole year
operation.
The proviso in the second paragraph of Article

280, LC is not applicable to petitioners case, in
order for them to be deemed regular employees.
The proviso is applicable only to the employees who
are deemed casuals but not to project employees
nor the regular employees treated in the first
paragraph of Article 280.
D. Fixed-Term Employees
BRENT SCHOOL v. ZAMORA

AZUCENA
Employment that will last only for a definite
period, as agreed by the parties, is not per se Prof. Alegre hired as athletics director for a fixed
illegal or against public policy. period of 5 years with Brent Intl School. He was
terminated upon the expiration of the contract. He then
For fixed-term employment contracts to be however sued for illegal dismissal claiming he had
valid, it should be shown that the fixed period already attained regular employment status.
was knowingly and voluntarily agreed upon by
the parties. There should have been no force, Held the test for whether or not it is a fixed period
duress or improper pressure or any vice of employment is that there is a fixed day certain when
consent. the employment would expire.
The court highlighted several work relations where
It should satisfactorily appear that the
fixed period contracts are normally applied (deans,
employer and the employee dealt with each
principals, chancellor, O.F.WS which was emphasized
other on more or less equal terms with no
by Maam)
moral dominance being exercised by the
former over the latter. Pursuant to art. 280 the court held that all fixed period
employments like all employment relations must not be
Where from the circumstances it is apparent
entered into in order to circumvent the security of
that periods have been imposed to preclude
tenure or any of the labor laws.
acquisition of tenurial security by the
employee, the contracts shall be struck down DUMPIT-MURILLO v. CA
1 On October 2, 1995, private respondent Associated

As per discussion. According to the case, they were project
Broadcasting Company (ABC) hired petitioner Thelma
employees.
Page 31 of 124
Dumpit-Murillo as a newscaster and co-anchor for

Balitang-Balita. The contract was for a period of three It is axiomatic that a contract of employment for a
months. In addition, petitioner's services were definite period terminates on its own force at the end
engaged for the program "Live on Five." of such period. The lack of notice of termination is of
no consequence because when the contract specifies
On September 30, 1999, after four years of repeated the length of its duration, it comes to an end upon the
renewals, petitioner's talent contract expired. Two expiration of such period. Respondent cannot claim
weeks after the expiration of the last contract, entitlement to any benefit flowing from such
petitioner sent a letter to Mr. Jose Javier, Vice employment after September 17, 2000, because the
President for News and Public Affairs of ABC, employment, which is the source of the benefits, had,
informing the latter that she was still interested in by then, already ceased to exist.
renewing her contract subject to a salary increase.
Thereafter, petitioner stopped reporting for work on In numerous cases decided by this Court, we had
November 5, 1999. taken notice, that by way of practice and tradition, the
position of dean is normally an employment for a fixed
On December 20, 1999, petitioner filed a complaint term. Although it does not appear on record and
against ABC, Mr. Javier and Mr. Edward Tan, for illegal neither was it alleged by any of the parties that
constructive dismissal, nonpayment of salaries, and respondent, other than holding the position of dean,
other benefits. concurrently occupied a teaching position, it can be
deduced from the last paragraph of said letter that the
WoN petitioner was illegally dismissed? YES respondent shall be considered for a faculty position in
the event he gives up his deanship or fails to meet
The court held that Petitioner was a regular employee
AMA's standards. Such provision reasonably serves
under contemplation of law. The practice of having the intention set forth in Brent School that the
fixed-term contracts in the industry does not deanship may be rotated among the other members of
automatically make all talent contracts valid and the faculty.
compliant with labor law. The assertion that a talent
contract exists does not necessarily prevent a regular
employment status. E. Seasonal Employees
AMA COMPUTER COLLEGE v AUSTRIA PHILIPPINE TOBACCO V. NLRC
Respondent Rolando A. Austria (respondent) was Due to supposed serious financial reverses and losses
hired by AMA on probationary employment as a suffered by Philippine Tobacco, the Lubat Group, who
college dean on April 24, 2000. The memorandum of are the seasonal employees, were not rehired for the
his appointment states that his appointment is effective 1994 tobacco season. They were merely informed that
April 17, 2000 to September 17, 2000. their employment had been terminated at the end of
the 1993 season
Sometime in August 2000, respondent was charged

with violating AMAs Employees Conduct and Seasonal workers who are called to work from time to
Discipline for leaking test questions and inefficiency. time and are temporarily laid off during off-season are
Respondent was placed on preventive suspension not separated from service in said period, but are
from September 8, 2000 to October 10, 2000. merely considered on leave of absence until re-
Eventually, on September 29, 2000, respondent was employed.
informed of his dismissal.
The employer-employee relationship between Phil

Respondent then filed a complaint for illegal dismissal. Tobacco and the Lubat Group was not terminated at
To be able to judge whether there was an illegal the end of the 1993 season. From the end of the 1993
dismissal or not, the court had to decide on whether season until the beginning of the 1994 season, they
respondent was a regular employee or a fixed term
employee (held: fixed term).
Page 32 of 124
were considered only on leave, but nevertheless still in engaged on probationary basis may be terminated
the employ of petitioner. only for a just cause or when authorized by existing
laws, or when he fails to qualify as a regular employee
in accordance with reasonable standards prescribed
F. Probationary Employees by the employer.
Art. 281. Probationary employment. Probationary (d) In all cases involving employees engaged on
employment shall not exceed six (6) months from the probationary basis, the employer shall make known to
date the employee started working, unless it is covered the employee the standards under which he will qualify
by an apprenticeship agreement stipulating a longer as a regular employee at the time of his engagement.
period. The services of an employee who has been
engaged on a probationary basis may be terminated
for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards Art. 75. Learnership agreement. Any employer
made known by the employer to the employee at the desiring to employ learners shall enter into a
time of his engagement. An employee who is allowed learnership agreement with them, which agreement
to work after a probationary period shall be considered shall include:
a regular employee.
Art. 61. Contents of apprenticeship agreements. d) A commitment to employ the learners if they so
Apprenticeship agreements, including the wage rates desire, as regular employees upon completion of the
of apprentices, shall conform to the rules issued by the learnership. All learners who have been allowed or
Secretary of Labor and Employment. The period of suffered to work during the first two (2) months shall be
apprenticeship shall not exceed six months. deemed regular employees if training is terminated by
Apprenticeship agreements providing for wage rates the employer before the end of the stipulated period
below the legal minimum wage, which in no case shall through no fault of the learners.
start below 75 percent of the applicable minimum
wage, may be entered into only in accordance with
apprenticeship programs duly approved by the 1. Definition/Purpose
Secretary of Labor and Employment. The Department
shall develop standard model programs of
apprenticeship. CEBU MARINE BEACH RESORT v. NLRC (2003)
Petitioner-company, Cebu Marine commenced its
operations with the recruitment of its employees,
Omnibus Rules, Book VI, Rule I, Sec. 6 including herein private respondents. As the beach
resort was intended to cater principally to Japanese
SECTION 6. Probationary employment. (a) tourists, private respondents had to undergo a special
Where the work for which an employee has been training in Japanese customs under Sasaki, also a
engaged is learnable or apprenticeable in accordance petitioner.
with the standards prescribed by the Department of
During a seminar conducted, petitioner Sasaki
Labor, the probationary employment period of the
employee shall be limited to the authorized learnership suddenly scolded respondents and hurled brooms,
or apprenticeship period, whichever is applicable. floor maps, iron trays, fire hoses and other things at
them. In protest, respondents staged a walk-out and
gathered in front of the resort. Immediately, petitioner
(b) Where the work is neither learnable nor Sasaki reacted by shouting at them to go home and
apprenticeable, the probationary employment period
never to report back to work. Private respondents,
shall not exceed six (6) months reckoned from the date
the employee actually started working. thereafter, filed a Complaint for Illegal Dismissal.
WON private respondents were illegally dismissed
(c) The services of an employee who has been
Page 33 of 124
YES, private respondents were illegally dismissed His request to be furnished a 30-day written notice
from the service. It is settled that while probationary was also denied.
employees do not enjoy permanent status, they are
entitled to the constitutional protection of security of Hence, De la Cruz, Jr. filed a case for illegal
tenure. Their employment may only be terminated for dismissal, non-payment of salary, backwages, 13 th
just cause or when they fail to qualify as regular month pay, and damages.
employees in accordance with reasonable standards
made known to them by their employer at the time of
Respondent Company offered the following
engagement, and after due process.
reasons for petitioners dismissal: Poor
Mr. Sasaki made an utterance to the effect that private performance as evidenced by drop in sales;
respondents should go home and never come back to Dissatisfaction of his subordinates over his
work for the company again. Such utterance is management style and dealings with companys
distributors; Unauthorized use of company cellular
tantamount to a dismissal.
phone for overseas personal calls; and Unauthorized
ESPINA v. CA reimbursement of the plane tickets for his wife and
child.
Employee who was hired as a probationary employee

Whether or not De la Cruz was validly dismissed
then fired before the 6 month expiration date stipulated
in their contract. Court: yes, he was validly dismissed.
The court upheld the termination as a valid exercise of

management prerogative. It was well within the rights The Court pointed out that the submission or his
of the employer to decide that the employees services familys plane tickets for reimbursement was
were no longer required and did not meet the tantamount to fraud and deceit which justified the
employers loss of trust and confidence in him.
demands of the job. So long as the termination was
before the 6 month period the probationary employee
was not a regular employee and could be terminated. Petitioner was holding a managerial position in which
he was tasked to perform key functions with an
exacting work ethic. His position required the full
2. Duration: Rule/Exception confidence of his employer. While petitioner could
exercise some amount of discretion, this obviously did
not cover acts for his own personal benefit.
DELA CRUZ v. NLRC
On his employment status, the Supreme Court
pointed out that he was a probationary employee
Petitioner De la Cruz, Jr. was hired on May 27, 1996 and was dismissed within the 6-month
by private respondent Shemberg Marketing probationary period. The Court pointed out that
Corporation as senior sales manager. Said position such was the case and noted that in his
was newly created in line with the companys objective appointment paper, it was indicated that his
of product positioning in the consumer market. Its performance is subject to evaluation and trial
duties, included among other things the supervision period for 6 months or more.
and control of the sales force of the company. The
position was also vested with some discretion to
decide on matters within the scope of his functions.
CATHAY PACIFIC AIRWAYS V. MARIN (2006)
On September 14, 1996 (barely four months after

his hiring), his employment was terminated by the Marin was employed by Cathay as a Reservation
respondent company. On Petitioners inquiry as to Officer on a probationary period of 6 months. After the
the reason, he was only informed that it had 6 month period, Marin was terminated from
something to do with the drop in the companys sales. employment. He filed a case of illegal dismissal
Page 34 of 124
against Cathay, claiming that he never received another 1 year contract she had already become a
documents informing him of Cathays employment regular employee.
standards, and that he came to know of the rules and The court cited 1702 and the idea that in case of doubt
regulations of the company on his own initiative. one should rule in favor of labor.
WON Marin was illegally dismissed? NO.
A probationary employee enjoys only temporary

employment status, not a permanent status. In
general, he is terminable anytime as long as 4. Absorbed Employees
termination is made before the expiration of the
probationary period. His employment may only be
CEBU STEVEDORING v. REGIONAL DIRECTOR
terminated for (1) just cause or (2) failure to qualify as
a regular employee in accordance with reasonable Private respondents were employees of the Cebu
standards the employer has made known to the Customs Arrastre Services (CCAS) which was
employee at the start of his work. abolished. Cebu Stevedoring Co. Inc (CSCI)
proceeded to absorb all of the employees laid off by
the CCAS and they were given the same positions
Cathay decided not to extend regular employment to they had held at CCAS. Later however, they were
Marin because his job performance during his dismissed by CSCI for redundancy.
probationary period was unsatisfactory. He was always
CSCI contended that the petitioners were mere
chatting noisily with friends on the phone and was
casuals and could be terminated at any time within the
always leaving calls from the public unattended,
6-month period without need for clearance from the
thereby disrupting the operations of his department.
Ministry of Labor and that redundancy is a valid
While it is true that Marin was not given copies of the
ground for termination.
company regulations and his assessment reports,
nevertheless he was briefed on their contents. WoN petitioners were probationary employees
They are not probationary employees. Private
respondents could not be considered probationary
The Court held that an employer cannot be compelled
employees because they were already well-trained in
to regularize a probationary employee who acts in a
their respective functions. This conclusion is further
manner contrary to basic knowledge and common
bolstered by the factual findings of the Labor Minister
sense, in regard to which there is no need to spell out
that said order of the Director was supported by
a policy or standards to be met.
substantial evidence. As stressed by the SolGen, while
private respondents were still with the CCAS they
3. Extension of Contract were already clerks. Respondent Gelig had been a
clerk for CCAS for more than ten (10) years, while
respondent Quijano had slightly less than ten (10)
PHIL. FEDERATION, ETC. V. NLRC (DECEMBER 11, years of service. They were, therefore, not novices in
1998) their jobs but experienced workers.
Employee hired on probationary status. She was then
rehired for a period of 1 year. After the 1 year period
she was terminated.
The contract here was clearly one of probation and
when the 6 month period lapsed and she was hired for
Page 35 of 124
has limited tenure, he still enjoys security of

tenure.
Generally, the probationary period is limited to
6 months. The exception to the rule is when
the parties to an employment contract agree
5. Standards not determined otherwise, such as when the long probation is
justified by the nature of work to be performed.
This may be considered as an exercise of
ORIENT EXPRESS PLACEMENT PHILIPPINES v. management prerogative.
NLRC
A voluntary agreement extending the original
probationary period, at the employees
The private respondent, Antonio F. Flores, was hired request, to give the employee a second
as a crane operator by the petitioner. His contract chance to pass the probation standards
stipulates a monthly salary of US$500 for one year
constitutes a lawful exception. (This is also
subject to three months of probation. He was made to
work as a floorman rather than a crane operator and beneficial to the employee.)
was dismissed after a month. However, a double or multiple probation is not
allowed.
Under Art. 281 of the Labor Code, the services of an Computation of the 6 month period according
employee hired on a probationary basis may be to Mitsubishi Motors (2004): 6 months means
terminated when he fails to qualify as a regular
employee in accordance with reasonable standards 180 days in conformity with Art 13 of the Civil
made known by the employer to the employee at the Code which provides that a month
time of his engagement. However, the Court cannot undesignated by name is understood to
sustain the dismissal of the private respondent on this consist of 30 days. This ruling is different from
ground because the petitioner failed to specify the CALS Pultry (2002) which says that a six-
reasonable standards by which private respondent's month period ends on the sixth month on the
alleged poor performance was evaluated, much less
same calendar date the probation started, e.g.
to prove that such standards were made known to him
at the time of his recruitment in Manila. from March 1 to September 1, even though
the period is actually 185 days. The controlling
ruling is that in Mitsubishi, being the latest.
6. Private School Teachers-Rule
Private School Teachers legal requisites for
regular employment:
AZUCENA a. teacher must be full-time
A probationary employee is one on tentative b. teacher must have rendered 3 consecutive
employment during which the employer years of service
determines whether he is qualified for
c. the service must have been satisfactory
permanent employment.
While the employer observes the fitness and
efficiency of a probationer, the latter seeks to LA SALETTE vs. NLRC
prove to the employer that he has the Javier served in various admin positions of the La
qualifications to meet the reasonable Salette System, while also holding a teaching position.
standards for permanent employment. Equity After her term as principal, she was replaced.
of rights exists.
Javier had not acquired tenure as principal. A
A probationary employee cannot be removed distinction should be drawn between the teaching staff
except for valid cause during the period of of private educational institutions and their department
probation. Although a probationary employee or administrative heads. The teaching staff may and
Page 36 of 124
should acquire tenure. On the other hand, teachers

appointed to serve as administrative officials do not
normally, and should not expect to a second or
additional tenure. The acquisition of such additional
tenure is the exception rather than the rule, and should
therefore be clearly and specifically provided by law or
contract.
MAGIS YOUNG ACHIEVERS LEARNNG v.

MANALO
Manalo was hired as a teacher and acting principal by
the school. Because the school was undertaking cost-
cutting schemes, it abolished the position of principal,
consequently terminating the services of Manalo.
Was Manalo a probationary employee? Yes. Was she
legally dismissed? No.
The rule in private schools is that teachers are put on
probationary employment in order to determine
whether they are qualified for permanent employment
or not. The governing law which is Sec. 92 of the 1992
Manual of Regulations for Private Schools states that
the probationary period shall not be more than 3
consecutive years of satisfactory service for those in
elementary and secondary levels, 6 consecutive
regular semesters for those in tertiary level and 9
consecutive trimesters for those in tertiary levels when
trisem is followed. Such rule as regards private school
teachers is in contrast to the general rule under the
Labor Code, which provides that probationary period
should not more than 6 months.
Manalo was illegally dismissed because although a
probationary EE, she was still protected and entitled to
security of tenure. The abolition of the position of
principal, not being one of the just causes for
termination under Art. 283, renders the dismissal
illegal.
Page 37 of 124
IV. TERMINATION OF EMPLOYMENT reinstatement.
Art. 277. Miscellaneous provisions.

A. General Concepts
b. Subject to the constitutional right of workers to
security of tenure and their right to be protected
Const. Art. 13, Sec. 3 against dismissal except for a just and authorized
cause and without prejudice to the requirement of
The State shall afford full protection to labor, local and
notice under Article 283 of this Code, the employer
overseas, organized and unorganized, and promote
shall furnish the worker whose employment is sought
full employment and equality of employment
to be terminated a written notice containing a
opportunities for all.
statement of the causes for termination and shall
It shall guarantee the rights of all workers to self- afford the latter ample opportunity to be heard and to
organization, collective bargaining and negotiations, defend himself with the assistance of his
and peaceful concerted activities, including the right to representative if he so desires in accordance with
strike in accordance with law. They shall be entitled to company rules and regulations promulgated pursuant
security of tenure, humane conditions of work, and a to guidelines set by the Department of Labor and
living wage. They shall also participate in policy and Employment. Any decision taken by the employer shall
decision-making processes affecting their rights and be without prejudice to the right of the worker to
benefits as may be provided by law. contest the validity or legality of his dismissal by filing a
The State shall promote the principle of shared complaint with the regional branch of the National
responsibility between workers and employers and the Labor Relations Commission. The burden of proving
preferential use of voluntary modes in settling that the termination was for a valid or authorized cause
disputes, including conciliation, and shall enforce their shall rest on the employer. The Secretary of the
mutual compliance therewith to foster industrial peace. Department of Labor and Employment may suspend
the effects of the termination pending resolution of the
dispute in the event of a prima facie finding by the
The State shall regulate the relations between workers appropriate official of the Department of Labor and
and employers, recognizing the right of labor to its just Employment before whom such dispute is pending that
share in the fruits of production and the right of the termination may cause a serious labor dispute or is
enterprises to reasonable returns to investments, and in implementation of a mass lay-off.
to expansion and growth.
ESPINA v. CA
1. Coverage
Employee who was hired as a probationary employee

Art. 278. Coverage. The provisions of this Title shall
apply to all establishments or undertakings, whether then fired before the 6 month expiration date stipulated
for profit or not. in their contract.
The court upheld the termination as a valid exercise of
management prerogative. It was well within the rights
2. Security of Tenure
of the employer to decide that the employees services
were no longer required and did not meet the
Art. 279. Security of tenure. In cases of regular demands of the job. So long as the termination was
employment, the employer shall not terminate the before the 6 month period the probationary employee
services of an employee except for a just cause or was not a regular employee and could be terminated.
when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other PHILIPPINE DAILY INQUIRER v. MAGTIBAY
privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation
was withheld from him up to the time of his actual
Page 38 of 124
In February 7, 1995, PDI hired Magtibay, on (b) when he fails to qualify as a regular employee in
contractual basis, to assist, for a period of five months accordance with reasonable standards made known
from February 17, 1995, the regular phone operator. by the employer to the employee at the time of his
Before the expiration of Magtibay's contractual engagement.
employment, he and PDI agreed to a fifteen-day
contract extension, or from July 17, 1995 up to July
31, 1995, under the same conditions as the existing
contract. a. Nature of Right/Rationale
After the expiration of Magtibay's contractual
employment, as extended, PDI announced the
ALHAMBRA INDUSTRIES INC v NLRC
creation and availability of a new position for a
second telephone operator who would undergo
probationary employment. Apparently, it was PDI's Alhambra Cigar and Cigarette Factory Co., was found
policy to accord regular employees preference for guilty of unfair labor practice by the NLRC in 1962.
new vacancies in the company. The court ordered the reinstatement by it or its
successor, petitioner Alhambra Industries, Inc. of
WoN Magtibay was illegally dismissed? NO Emiliano Averilla, Maglayon Pangan, Alfredo Roy,
Ricardo Bernardino and Juliana Lapasaran to their
Management and labor, or the employer and the
former positions or to substantially equivalent positions
employee are more often not situated on the same in such corporation. The petitioner filed a petition for
level playing field, so to speak. Recognizing this certiorari questioning such decision but the Supreme
reality, the State has seen fit to adopt measures Court upheld the NLRC.
envisaged to give those who have less in life more in
law. Article 279 of the Labor Code which gives
However, the company still refused the reinstatement.
employees the security of tenure is one playing field
It continued to appeal by seeking a reopening of the
leveling measure. case claiming newly discovered evidence and that
Art. 279. Security of Tenure. In cases of reinstatement is impossible because the positions of
regular employment, the employer shall not the respondents have been abolished.
terminate the services of an employee except for
a just cause or when authorized by this Title. . . The court dismissed the petition noting that there is
Art. 281. Probationary employment. really no newly discovered evidence and that petitioner
company is just delaying again what has already been
Probationary employment shall not exceed six (6)
final and executory for a long time by now.
months from the date the employee started working,
unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an The basic theory of the Industrial Peace Act is to
employee who has been engaged on a probationary recognize the right to self-organization to enable labor
basis may be terminated for a just cause or when he unions to bargain collectively and to avoid unfair labor
practices on the part of labor and management in
fails to qualify as a regular employee in accordance
order to attain industrial democracy. The sooner then
with reasonable standards made known by the an inquiry is made into alleged unfair labor practices
employer to the employee at the time of his and the sooner it is stopped, the better for harmonious
engagement. An employee who is allowed to work labor-management relations. To discourage each party
after a probationary period shall be considered a from committing such unfair labor practices, sanctions
regular employee. are provided for. Here, management was at fault, and
petitioner, as the successor, can be compelled to
Within the limited legal six-month probationary period, reinstate and to pay back wages. That order dates
probationary employees are still entitled to security of back to April 3, 1962. That order until now (1994) has
tenure. It is expressly provided in the afore-quoted not been complied with. If we reopen the case to allow
Article 281 that a probationary employee may be petitioner to introduce evidence with respondent Court
terminated only on two grounds: (a) for just cause, or to show why it has not complied with the order of
reinstatement, we shall in effect be rendering futile the
Page 39 of 124
rights of labor and frustrating the policies of the student filed a complaint against petitioner for alleged
Industrial Peace Act. Considering the circumstances irregularities in the performance of her work. Petitioner
disclosed, we cannot and should not do so. was told to submit her answer to the complaint and
given several extensions within which to do so but still
failed.
The Dean of the College recommended the
assignment of petitioner outside the College of Law
following the latters failure to file her answer. On the
same day, a Department Order was issued
reassigning petitioner to the office of the Principals of
the HS and Elementary Departments. Violating the
order, petitioner did not report for work and instead
took a vacation leave and several other leave of
absences before filing a complaint for constructive
b. Management Prerogative dismissal.
WON the transfer of petitioner from the College of
SULDAO v. CIMECH SYSTEM CONSTRUCTION
Law to the HS and GS Department amounted to
Cimech Systems Construction, owing to a dearth in constructive dismissal
projects, ordered Suldao to take a leave of absence as NO, petitioner cannot claim constructive dismissal
well as to make a letter-request for fieldwork transfer. simply because her transfer to another department
He complied with both, but was barred from entering
the premises. He filed for constructive dismissal. was against her wishes and in her view, amounts to a
demotion. Mere incidental inconvenience is not
While the decision to transfer employees to other
enough to warrant a claim of constructive dismissal.
areas of its operations forms part of the well
recognized prerogatives of management, it must be As long recognized by the Court, MANAGEMENT has
stressed, however, that the managerial prerogative to the PREROGATIVE to transfer an employee from one
transfer personnel must not be exercised with grave office to another within the same business
abuse of discretion, bearing in mind the basic
establishment, as the exigency of the business may
elements of justice and fair play. Having the right
should not be confused with the manner in which that require, provided that the transfer does not result in a
right is exercised. Thus it cannot be used as a demotion in rank or a diminution in salary, benefits and
subterfuge by the employer to rid himself of an other privileges of the employee; or is not
undesirable worker. unreasonable, inconvenient or prejudicial to the latter;
or is not used as a subterfuge by the employer to rid
himself of an undesirable worker.
While petitioner's transfer was valid, the manner by
which respondent unjustifiably prevented him from
returning to work on several occasions runs counter to
the claim of good faith on the part of Cimech. By c. Requisites for lawful dismissal: Concurrence
reporting for work, petitioner manifested his willingness of Substantive and Procedural Due Process
to comply with the regulations of the corporation and
his desire to continue working for the matter. However,
he was barred from entering the premises without any LANDTEX INDUSTRIES v. CA
explanation which is a veritable hallmark of
constructive dismissal.
Ayson was accused of committing acts contrary to
company policies. Company hearings were done to
DULDULAO v. CA (2007) which to some of those Ayson was absent due to
reasonable grounds. For failure to cooperate,
Petitioner Duldulao was hired by respondent Baguio
management dismissed him.
Colleges Foundation (BCF) as secretary/clerk-typist
and assigned to the College of Law. A certain law
Page 40 of 124
WON Ayson was illegally dismissed. Yes. for work at the Tacloban plant. The security guard
refused her entry. This prompted respondent, within a
year after she was refused entry, to file a case for
The requisites for a valid dismissal are (1) the illegal dismissal.
dismissal must be for any of the causes expressed in
Article 282 of the Labor Code,and (2) the opportunity
to be heard and to defend oneself. Whether respondent was accorded procedural due
process before her separation from work.
No, she was not
Procedural due process in the dismissal of employees
requires notice and hearing. The employer must
furnish the employee two written notices before In dismissing an employee, the employer has the
termination may be effected. The first notice apprises burden of proving that the dismissed worker has been
the employee of the particular acts or omissions for served two notices: (1) the first to inform the
which his dismissal is sought, while the second notice employee of the particular acts or omissions for which
informs the employee of the employers decision to the employer seeks his dismissal, and (2) the second
dismiss him. In the present case, Landtex more than to inform the employee of his employer's decision to
complied with the two-notice rule. terminate him. The first notice must state that the
employer seeks dismissal for the act or omission
charged against the employee; otherwise, the notice
The validity of the charge must be established in a does not comply with the rules.
manner consistent with due process. A suspicion or
belief no matter how sincerely felt cannot substitute for
factual findings carefully established through an The Court cited Maquiling v. Philippine Tuberculosis
orderly procedure. The dismissal must be for a just Society, Inc. wherein the Court explained the rationale
cause, let alone with due process, and must be based behind the requirement of the notices:
on substantial evidence. Mere allegations will not
suffice.
This notice will afford the employee an opportunity to
avail all defenses and exhaust all remedies to refute
COCA-COLA BOTTLERS v. VALENTINA GARCIA the allegations hurled against him for what is at stake
is his very life and limb his employment. Otherwise,
the employee may just disregard the notice as a
Coca-Cola Bottlers Philippines, Inc. (petitioner) hired warning without any disastrous consequence to be
Valentina G. Garcia (respondent) as Quality Control anticipated. Absent such statement, the first notice
Technician on probationary status. She was assigned falls short of the requirement of due process
at petitioner's Tacloban plant. On June 1, 1989 she
became a regular employee. She was the most junior
In the present case, the Supreme Court held that
among the personnel in the Quality Control
petitioner was not able to comply with the
Department. In the middle of 1989, petitioner adopted
requirements for dismissing an employee. The Court
some modernization programs which resulted in
held that the records are wanting of proof that
increased efficiency and production. Likewise, the
respondent was properly apprised of the charges
work load of their employees was substantially
against her and given an opportunity to explain her
reduced. As a result, one employee in the Department
side, as petitioner maintains. Evidently, it is clear that
became redundant. Under the Collective Bargaining
respondent's dismissal was effected without the notice
Agreement (CBA) and Article 283 of the Labor Code,
required by law.
respondent, as the most junior employee of the
Department could be validly terminated. However,
instead of terminating respondent on ground of
redundancy, petitioner decided to assign her to its d. Burden of Proof
Iloilo plant. Upon being informed of the companys
decision, respondent refused to be transferred.
Petitioner petitioner nonetheless pushed through with Art. 277. Miscellaneous provisions.
respondent's transfer. On June 26, 1990, petitioner
gave respondent notice of her transfer to take effect on b. The burden of proving that the termination was for a
July 2, 1990. Yet, on said date, respondent reported valid or authorized cause shall rest on the employer.
Page 41 of 124
in fraudulent transaction, misappropriation of

companys funds, serious disobedience of the lawful
CHAVEZ V. NLRC (2005)
order of the employer.
After the hearing of the administrative investigation,
Supreme Packaging, Inc. engaged the services of the respondent was dismissed.
Chavez as truck driver. Chavez expressed his desire
Respondent filed a complaint for illegal dismissal
to be regularized, and was told he would be extended
before the LA but on appeal, the case was remanded
this benefit, but the company reneged on its promise.
back to the LA for further proceedings.
Chavez filed a complaint of regularization, but was
subsequently terminated from work. Chavez now The LA ruled that petitioners failed to satisfactorily
claims illegal dismissal. prove the serious charges against respondent, this
decision was affirmed by the NLRC, the CA and the
SC.
WON the company was able to prove that Chavez was
The only relevant evidence adduced by petitioners
validly terminated? NO.
was the notice of termination which narrated what
happened during the administrative investigation.
According to Art 277(b), 3 rd sentence, the burden of WoN private respondents were validly dismissed.
proving that dismissal is valid rests upon the employer.
No, they were not. In an illegal dismissal
In this case, Supreme Packaging failed to discharge
this burden. The company failed to prove that Chavez case, the onus probandi [burden of proof] rests on the
abandoned his work or was guilty of gross and employer to prove that its dismissal of an employee is
habitual negligence. for a valid cause.
In the instant case, petitioners failed to present
evidence to justify respondent's dismissal.
Chavez obviously did not intend to sever his
relationship with the company because at the time he Save for the notice of termination, there was no
allegedly abandoned his job, Chavez just filed a evidence which would clearly and convincingly show
complaint for regularization. A charge of abandonment that respondent was guilty of the charges imputed
is totally inconsistent with a complaint for against him.
regularization or illegal dismissal. There was no compelling reason why petitioners would
rather present their witnesses on direct testimony
rather than reduce their testimonies
Negligence, to warrant dismissal, should not merely be
into affidavits. The submission of these affidavits
gross but also habitual. In this case, the single and
appears to be the more prudent course of action
isolated act of Chavez negligence in not properly
particularly when the LA informed the parties that no
maintaining the truck does not amount to gross and
further trial will be conducted in the case.
habitual neglect warranting dismissal.
e. Measure of Penalty
PEPSI COLA v. EV SANTOS

AZUCENA:
Because of the damage suffered by the petitioner in
the alleged artificial sales of articles made by sales Security of tenure means the right not to be
personnel of Libis under the instruction of the removed from ones job except for a valid
respondent, the petitioner charges the respondents for reason and through the proper procedure.
violation of the companys rules and regulation When a person has no property, his job may
committed as follows, falsification of document and possibly be his only possession or means of
records or knowingly using such falsified document livelihood. He should be protected against any
and record, breach of trust and confidence, engaging arbitrary deprivation of his job.
Page 42 of 124
Even managerial employees are entitled to workers. Nor did such behavior cause substantial
security of tenure. prejudice to the business of petitioner. Moreover, the
alleged previous infractions could not be used as
Even in cases of non-regular employment, the
justification for his dismissal as these had been
employees still have security of tenure.
admittedly condoned by petitioners.
JACKQUI MORENO V. SAN SEBASTIAN COLLEGE-
BAGO v. NLRC RECOLETOS
Full-time faculty member Moreno violated a school
The petitioner, along with others, was charged of policy by engaging in unauthorized external teaching
rumor-mongering and manipulating money out of engagements. She was therefore dismissed.
agent and zone managers. They were eventually
dismissed. Her dismissal violated her right to substantive due
process as the school failed to prove its legality. SSC-
R failed to prove that Morenos misconduct was
The penalty of dismissal is justified even if the amount
induced by a perverse and wrongful intent as required
of money loss was not established and considering her
8 years of service in the company. The court held in in Art. 282(a). Moreno indeed committed a misconduct
the case of Salvador v. Philippine Mining Service Corp but such misconduct falls below the required level of
that Unlike other just causes for dismissal, trust in an gravity that would warrant a dismissal as penalty. Even
employee, once lost is difficult, if not impossible, to if dismissal for cause is the prescribed penalty (as
regain and in the case of Flores v. NLRC: provided in the Manual and employment contract), still,
The infraction that he committed, vis--vis his her dismissal was disproportionate to the offense.
long years of service with the company, While an employer enjoys a wide latitude of discretion
reflects a regrettable lack of loyalty. Loyalty in the promulgation of policies, rules and regulations
that he should have strengthened instead of on work-related activities of the employees, those
betrayed. If an employees length of service is
directives, however, must always be fair and
to be regarded as a justifying circumstance in
moderating the penalty of dismissal, it will reasonable, and the corresponding penalties, when
actually become a prize for disloyalty, prescribed, must be commensurate to the offense
perverting the meaning of social justice and involved and to the degree of the infraction.
undermining the efforts of labor to cleanse its
Special circumstances were present in Morenos case
ranks of all undesirables
which should have been properly taken into account in
the imposition of the appropriate penalty. Moreno must
SSPC vs. BARDAJE be reinstated but without payment of backwages.
Bardaje, SSPCs employee, was involved in an
altercation with petitioners security guard after the B. Termination of Employment by Employee
latter singled him out in ordering him to remove the
long-sleeved shirt he (Bardaje) wore over his uniform.
He was terminated by petitioner on the ground that his 1. Resignation
continued employment would pose a serious and
imminent threat to the life and property of the company
or any of its workers. In forming such a conclusion, it ORIENTAL SHIPMANAGEMENT CO. v. CA
took note of respondents previous infractions.
Bardaje had been illegally dismissed. His misconduct Employees were employed on board a ship for a one
on the said incident does not warrant the ultimate year contract. They were subsequently granted a raise
penalty of dismissal. It is cruel and unjust to impose a by the International Transport Workers Federation
penalty of dismissal if not commensurate to the (ITF). An ITF inspector found that they were not being
misdeed. The momentary work stoppage did not pose paid the raises pursuant to the agreement. They then
a threat to the safety and peace of mind of the signed letter of indemnity promising not to file suits
Page 43 of 124
against their employers and repatriated to the

Philippines. Petitioners then filed a complaint for illegal dismissal.
It would have been illogical for the employees to have
resigned and then filed a case for illegal dismissal. It Here, the Labor Arbiter, the NLRC, and the Court of
was held here that employees were under pressure to Appeals were unanimous in finding that the primary
sign the quitclaims to have any hopes of receiving their reason why Dacut and Tungala resigned was the
unpaid wages. The court also held that it is unlikely vessel's alleged unseaworthiness as borne by their
that the employees would resign after just receiving a pleadings before the Labor Arbiter. Dacut and Tungala
raise in their salaries. never mentioned that they resigned because they
were being harassed by the company due to a
GLOBE TELECO v. CRISOLOGO complaint for violation of labor standards they had filed
against it. This ground was alleged only before the
NLRC and not a single act or incident was cited to
Respondent Jenette Marie B. Crisologo, a lawyer, prove this point. Even the alleged assurance by Orlina,
joined Globe Telecom (Globe) on November 3, that they would be given separation pay, served
1998 as a manager in its corporate legal services merely as a secondary reason why they resigned. In
fact, we doubt that such assurance was even made
department.
considering that as secretary of the Personnel
Respondent sent petitioner Gonzales a letter Manager, it was not shown under what authority Orlina
complaining of her "ill-treatment" by the company after acted when she told Dacut and Tungala to resign.
she submitted her resignation letter. She also confided
that she resigned only because the e-mail damaged
her name and reputation.
a. Just Causes
Believing that Globe would not comply with her
demands, respondent filed a complaint for illegal
dismissal against petitioners. Art. 285. Termination by employee.
WoN respondent was illegally dismissed? NO
b. An employee may put an end to the relationship
Respondent's resignation letter proves she voluntarily without serving any notice on the employer for any of
resigned. Respondent personally drafted her the following just causes:
resignation letter in a clear, concise and categorical
language. Its content, as quoted above, confirmed
her unequivocal intent to resign. 1. Serious insult by the employer or his representative on
the honor and person of the employee;
Resignation is the voluntary act of an employee who
finds herself in a situation where she believes that 2. Inhuman and unbearable treatment accorded the
personal reasons cannot be sacrificed in favor of the employee by the employer or his representative;
exigency of the service and that she has no other
choice but to disassociate herself from employment. 3. Commission of a crime or offense by the employer or
LAZARO v DACUT his representative against the person of the employee
or any of the immediate members of his family; and
4.
Petitioners were crew members of a cargo vessel
owned by private respondent. 5. Other causes analogous to any of the foregoing.
There was a hole in the vessel's engine room. The b. Without Just Cause Requisites
company had the hole patched up with a piece of iron
and cement. Despite the repair, Dacut and Tungala
resigned in July 1999 due to the vessel's alleged Art. 285. Termination by employee. An employee
unseaworthiness. may terminate without just cause the employee-
Page 44 of 124
employer relationship by serving a written notice on when he was refused admission by his employer,
the employer at least one (1) month in advance. The negated any intention on his part to relinquish his job.
employer upon whom no such notice was served may
hold the employee liable for damages.
APRIME SECURITY SERVICES v. NLRC (2000)
Consti Art III ,Sec 18 Moreno, private respondent, had been working as a
security guard for a year with the Sugarland Security
No involuntary servitude in any form shall exist except Services, Inc., a sister company of petitioner.
as a punishment for a crime whereof the party shall
have been duly convicted. Later on, he was absorbed by the petitioner when it
took over the security contracts of its sister company,
Sugarland.
AZUCENA: Moreno alleged that he was forced by petitioner to sign
new probationary contracts of employment for six (6)
Voluntary resignation act of an employee
months. Subsequently, his employment was
who finds himself in a situation where he
terminated by petitioner. Petitioner, for its part, alleged
believes that personal reasons cannot be
that the private respondent was hired on a
sacrificed in favor of the exigency of the
probationary basis; that Moreno was caught sleeping
service and he has no other choice but to
on post contrary to the Companys rules and regulation
disassociate himself from his employment.
and that he figured in a quarrel with another security
Resignation is withdrawable even if the guard,
employee has called it irrevocable.
WON private respondents dismissal is illegal
But after the resignation is accepted by the
YES, Morenos dismissal was unjust and illegal for
employer, its withdrawal needs the employers
want of just cause. The dismissal of private
consent.
respondent was presumably based (1) on the results
A demotion or a forced resignation may cause of his behavioral and neuropsychological tests and (2)
a complaint of constructive dismissal. on his violation of company rule on sleeping on post.
On the first ground, the Court expressed its doubt as
to the veracity of the test results. As observed by the
Court, the evaluators mind was already
preconditioned towards buttressing respondents intent
AZCOR MANUFACTURING INC. V NLRC of terminating complainants employment, considering
that the same was issued on the very day of the
dismissal in question.
Capulso filed a complaint for constructive dismissal.
However, Azcor aver that Capulso was a former Anent the second ground, private respondents alleged
employee who resigned as evidenced by the letters of violations of sleeping on post, and quarrelling with a
resignation. co-worker, may not be proper grounds for dismissal,
as the same were first infractions per petitioners
circular governing discipline, suspension and
To constitute resignation, it must be unconditional and
separation from the service of security guards.
with the intent to operate as such. There must be an
intention to relinquish a portion of the term of office 2. Performance of Military or Civic Duty
accompanied by an act of relinquishment.
Art. 286. When employment not deemed

The fact that he signified his desire to resume his work terminated. The bona-fide suspension of the
when he went back after recuperating from his illness, operation of a business or undertaking for a period not
and actively pursued the case for illegal dismissal exceeding six (6) months, or the fulfillment by the
employee of a military or civic duty shall not terminate
Page 45 of 124
employment. In all such cases, the employer shall JSS INDOCHINA CORP v. FERRER
reinstate the employee to his former position without
loss of seniority rights if he indicates his desire to
resume his work not later than one (1) month from the Two employees were hired for a specific job but were
resumption of operations of his employer or from his assigned to another job. They were dismissed for
relief from the military or civic duty. refusal to work on the job they didnt sign up to do.
Omnibus Rules, Book VI, Rule I, Sec. 12 WON the two employees were illegally dismissed. Yes.
Suspension of relationship. The employer-employee
relationship shall be deemed suspended in case of
The Court found the the decision to resign from their
suspension of operation of the business or undertaking
employment were made by force of circumstances not
of the employer for a period not exceeding six (6)
attributable to their own fault, and it was not their
months, unless the suspension is for the purpose of
fault that they were left out from among those workers
defeating the rights of the employees under the Code,
who were considered for employment by the foreign
and in case of mandatory fulfillment by the employee
employer. There is no question that petitioner
of a military or civic duty. The payment of wages of the
violated its contract with respondents.
employee as well as the grant of other benefits and
privileges while he is on a military or civic duty shall be
subject to special laws and decrees and to the Section 10 of RA 8042. In case of termination of
applicable individual or collective bargaining overseas employment without just, valid or authorized
agreement and voluntary employer practice or policy. cause as defined by law or contract, the worker shall
be entitled to the full reimbursement of his placement
fee with interest at twelve percent (12%) per annum,
3. Forced Resignation plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every
year of the unexpired term, whichever is less.
AZUCENA:
According to Art 286 a bona fide suspension of
C. Termination of Employment by Employer
business operations for a period not
exceeding 6 months does not terminate
employment and no notice need be given to 1. Substantive Requirements Just Causes
the employee or to DOLE.
The temporary lay-off wherein the employees
Art. 282. Termination by employer. An employer may
cease to work should not last longer than 6
terminate an employment for any of the following
months. After 6 months, the employees should causes:
either be recalled to work or permanently
retrenched. Otherwise, the suspension is
tantamount to dismissing the employees and a. Serious misconduct or willful disobedience by the
the employer would be liable. employee of the lawful orders of his
employer or representative in connection with his work;
When the floating status of the employees
lasts more than 6 months, they may be
considered to have been constructively b. Gross and habitual neglect by the employee of his
dismissed. duties;
c. Fraud or willful breach by the employee of the trust

reposed in him by his employer or duly
authorized representative;
Page 46 of 124
d. Commission of a crime or offense by the employee

against the person of his employer or
a. Basis
any immediate member of his family or his duly
authorized representatives; and
OCEAN EAST AGENCY CORP. v. NLRC
e. Other causes analogous to the foregoing.
The private respondents was employed as master of
Art. 279. Security of tenure. In cases of regular the master of the ship M/V Alpine. He was repatriated
employment, the employer shall not terminate the while docked at Cuba and was informed of subsequent
services of an employee except for a just cause or transfer. He was insulted and refused to be
when authorized by this Title. An employee who is transferred.
reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of The dismissal was made within the sphere of
allowances, and to his other benefits or their monetary
management prerogative. The Court pointed out the
equivalent computed from the time his compensation
was withheld from him up to the time of his actual exercise of said prerogative of an employer to regulate
reinstatement. all aspects of employment must be in keeping with
good faith and not to be used as a pretext for defeating
the rights of employees under the laws and applicable
Art. 277. Miscellaneous provisions. contracts.
b. Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized b. Just Causes Requisites
cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer
1. Serious Misconduct/Willful Disobedience
shall furnish the worker whose employment is sought
to be terminated a written notice containing a (Insubordination)
afford the latter ample opportunity to be heard and to Art. 282. Termination by employer. An employer may
defend himself with the assistance of his terminate an employment for any of the following
representative if he so desires in accordance with causes:
company rules and regulations promulgated pursuant
to guidelines set by the Department of Labor and
a. Serious misconduct or willful disobedience by the
Employment. Any decision taken by the employer shall
employee of the lawful orders of his employer or
be without prejudice to the right of the worker to
representative in connection with his work;
contest the validity or legality of his dismissal by filing a
complaint with the regional branch of the National
Labor Relations Commission.
HA YUAN RESTAURANT v. NLRC
Soria was a cashier in Ha Yuan; while on break, she
The burden of proving that the termination was for a
assaulted her co-worker, which resulted in a scuffle
valid or authorized cause shall rest on the employer.
between them. They were banned from working with
The Secretary of the Department of Labor and
the SM food courts premises. She filed a complaint for
Employment may suspend the effects of the
illegal dismissal, salary differentials, service incentive
termination pending resolution of the dispute in the
leave, separation pay and damages.
event of a prima facie finding by the appropriate official
of the Department of Labor and Employment before
whom such dispute is pending that the termination Dismissal was legal, no separation pay shall be
may cause a serious labor dispute or is in awarded. Separation pay depends on the cause of
implementation of a mass lay-off. dismissal; it is only awarded where the employee is
validly dismissed for causes other than serious
misconduct or those reflecting on his moral character.
Page 47 of 124
Sorias cause of dismissal was serious misconduct as consistently harassing her for not joining their Union.
she inflicted injuries on her co-worker, disturbed the Gatus filed against QH a complaint for unfair labor
peace in the workplace and committed a breach of practice and illegal dismissal, with claims for moral and
discipline. Those who invoke social justice may do so
exemplary damages.
only if their hands are clean and their motives
blameless and not simply because they happen to be WoN Quality House was able to prove that her
poor. dismissal was for a just and valid cause (for instigating
CITIBANK NA V. NLRC (2008) the mauling done by her husband)
Yes, she was validly dismissed by Quality House.
Rosita was a filing clerk of Citibank. She received a Gatus states that her utterance of the words sige pa,
memo calling her attention to various misfiling on sige pa was never proven and that the CA erred in
reorganized files. She had also not been submitting
holding that her act of complaining to her husband
her status reports, and had accumulated 2 boxes of
unfinished work. Her attention was called again when about her supervisor constitutes an admission of her
she failed to resolve the above issues. After being participation in the assault since it was only normal for
terminated from work, she filed a case of illegal a wife to share her work troubles with her husband.
dismissal against Citibank. The SC however found that she had already harbored
deep resentment towards the victim and that her act of
shouting sige pa actually emboldened her husband in
NLRC dismissed her complaint and found Rositas
dismissal valid based on work inefficiency. Rosita filed his act. Furthermore, the fact that he was there at the
an MFR where she no longer challenged her dismissal waiting shed when he was not a company employee at
but alleged that because she was found guilty of the precise time that her supervisor was also there
inefficiency, and NOT of misconduct, then according to showed that he purposely went to the shed to confront
company rules, she is entitled to her retirement the victim as found by the LA. This fact was
benefits. corroborated by two other QH employees. The CA
found that rhe mauling incident that resulted from the
WON Rosita was guilty only of inefficiency? NO. prodding of private respondent shows her to be unfit to
continue working for her employer. Her admitted
grievances translated into the concrete act of violence
Rosita was validly dismissed not only for work performed against her supervisor who represented her
inefficiency but also for serious misconduct. Thus she
employer. Undoubtedly, her continued employment
is not entitled to retirement benefits.
would cause undue strain in the workplace. Taken
lightly, the incident would inspire the breakdown of
The performance appraisals of Rosita noted her respect and discipline among the workforce. It is, at
significant behavioral and attitudinal problems. She the very least, a serious misconduct of a grave and
was argumentative, difficult to work with, and had aggravated character that directly violated the
unreasonable behavior and deportment. When an
personal security of another employee due to an
employee, despite repeated warnings from the
employer, refuses to reform his disposition such that it employment-related cause.
erodes the morale of co-employees, the same may be
a ground for dismissal for serious misconduct. 2. Gross and Habitual Neglect of Duties
Art. 282. b. Gross and habitual neglect by the
GATUS v. QUALITY HOUSE employee of his duties;
Rosario Gatus worked for Quality House (QH) as
assembler and was placed under preventive NATIONAL BOOKSTORE v. CA
suspension and later dismissed on the ground that her
husband had assaulted one of her co-employees and
that she had egged him on. She had submitted the The private respondents were dismissed for gross
explanation that the reason the mauling had happened neglect of duty when they had a shortage on their
was because the victim had been one of those
Page 48 of 124
account of the sales of the company one particular authorized representative;

day.
MERCURY DRUG CORP. v. SERRANO

Gross negligence has been defined as the want or
absence of or failure to exercise slight care or Serrano was employed as pharmacy assistant. She
diligence, or the entire absence of care. It evinces a was terminated on the ground of loss of trust and
thoughtless disregard of consequences without confidence due to dishonesty as she was found to
exerting any effort to avoid them. In order to constitute
have pocketed 120 which was given as payment for
a just cause for the employees dismissal, the neglect
of duties must not only be gross but also habitual. Squalene tablets. Serrano denied that she pocketed
Thus, the single or isolated act of negligence does not the money and argued that she had merely forgotten
constitute a just cause for the dismissal of the about the said payment since the customer did not
employee. anymore ask for a receipt.
On the other hand, loss of trust and confidence to Was Serrano validly terminated? Yes.
be a valid ground for dismissal must be based on a
willful breach of trust and founded on clearly Serrano was terminated on the ground of Article 282(c)
established facts. A breach is willful if it is done of the Labor Code which states that an employee may
intentionally, knowingly and purposely, without be terminated on the ground of fraud or willful breach
justifiable excuse, as distinguished from an act done by the employee of the trust reposed on him by his
carelessly, thoughtlessly, heedlessly or inadvertently. employer. An employee who holds the confidence of
management has a greater duty to management than
TRES REYES vs. MAXIMS ordinary workers. The betrayal of this trust is the
essence of the offense. Loss of trust and confidence
Tres Reyes was employed as Maxims driver. He was does not require proof beyond reasonable doubt.
involved in a vehicular accident, of which he was not at Serrano is guilty of dishonesty and this made her
fault. He was suspended and subsequently dismissed unworthy of the trust and confidence reposed on her
as a result of such incident. by Mercury. While Serrano was dismissed from the
Petitioner was illegally dismissed. Under the Labor theft case for the prosecutions failure to prove her
Code, gross negligence is a valid ground for an guilt beyond reasonable doubt, the evidence against
employer to terminate an employee. In this case, Serrano substantially proved her culpability
theres no evidence to find that petitioner was grossly warranting her dismissal from employment. Serranos
negligent. He exerted reasonable effort under the act of dishonesty did not require criminal conviction.
circumstances to avoid injury to himself, his UNIWIDE SALES WAREHOUSE CLUB v. NLRC
passengers and the van he was driving. Also, no
imputation of habitual negligence can be drawn Employee sent memorandum seeking an explanation
against him, since the earlier accident was not of his regarding the incidents for alleged irregularities such
own making. as allowing the entry of unauthorized persons inside a
restricted area during non-office hours, falsification of
GROSS NEGLIGENCE is negligence characterized by or inducing another employee to falsify personnel or
want of even slight care, acting or omitting to act in a
company records, sleeping and allowing a non-
situation where there is a duty to act, not inadvertently
but willfully and intentionally with a conscious employee to sleep inside the private office,
indifference to consequences insofar as other persons unauthorized search and bringing out of company
may be affected. records, purchase of damaged home furnishing items
without the approval from superior, taking advantage
of buying damaged items in large quantity, alteration of
approval slips for the purchase of damaged items and
3. Loss of Trust and Confidence
abandonment of work. She was dismissed, and filed
Art. 282. c. Fraud or willful breach by the employee of illegal dismissal.
the trust reposed in him by his employer or duly
Ratio: with respect to rank-and-file personnel, loss of
trust and confidence as ground for valid dismissal
Page 49 of 124
requires proof of involvement in the alleged events in It should be genuine and not simulated; nor should it
question, and that mere uncorroborated assertions appear as a mere afterthought to justify an earlier
and accusations by the employer will not be sufficient. action taken in bad faith or a subterfuge for causes
which are improper, illegal or unjustified. It has never
But, as regards a managerial employee, mere
been intended to afford an occasion for abuse
existence of a basis for believing that such because of its subjective nature. There must,
employee has breached the trust of his employer therefore, be an actual breach of duty committed by
would suffice for his dismissal. the employee which must be established by
substantial evidence.
SALAS v. ABOITIZ ONE INC.
Oligario Salas was hired as assistant utility man by In this case, Aboitiz utterly failed to establish the
respondent Aboitiz One, Inc. and was initially assigned requirements prescribed by law and jurisprudence for
at the Maintenance Department-Manila Office. a valid dismissal on the ground of breach of trust and
confidence.
He rose from the ranks and became material controller

under the Materials Management Operations Team. As Aboitiz's reliance on the past offenses of Salas for his
material controller, Salas was tasked with monitoring eventual dismissal is likewise unavailing. The correct
and maintaining the availability and supply of rule has always been that such previous offenses may
Quickbox needed by Aboitiz in its day-to-day be used as valid justification for dismissal from work
operations. only if the infractions are related to the subsequent
offense upon which the basis of termination is
decreed.
On June 4, 2003, Salas had run out of Large
Quickbox, hampering Aboitiz's business operation. The
following day, June 5, 2003, Aboitiz wrote Salas a
memorandum requiring the latter to explain in writing VENTURA v. CA
within seventy-two (72) hours why he should not be
disciplinarily dealt with for his (i) failure to monitor the The nephew of the petitioner committed theft of
stock level of Large Quickbox which led to inventory properties of the company. In the sworn statement of
stock out; and (ii) failure to report to [his] immediate the nephew, he narrated that he went to the house of
superior the Large Quickbox problem when the stock the petitioner to divulge to him information regarding
level was already critical, when the Large Quickbox the theft.
level was near stock out, and the stock level had a
stock out.
Subsequently, petitioner was given a notice of
termination and was fired from the company for
An administrative hearing was conducted to give Salas concealing the information regarding the criminal
ample opportunity to explain his side. However, his activities in the company, particularly those committed
explanation was not convincing that Aboitiz had to by Lejos (nephew), thus, constituting a willful breach of
terminate him for loss of trust and confindence. trust. The company also informed petitioner that a
case had already been filed with the Prosecutor's
office, impleading petitioner as an accessory to the
The loss of trust must be based not on ordinary breach crime of theft.
but, in the language of Article 282(c) of the Labor
Code, on willful breach. A breach is willful if it is done
intentionally, knowingly and purposely, without Under Article 282(c) of the Labor Code, loss of trust
justifiable excuse, as distinguished from an act done and confidence is one of the just causes for dismissing
carelessly, thoughtlessly, heedlessly or inadvertently. It an employee, where the employee is entrusted with
must rest on substantial grounds and not on the duties of confidence on delicate matters, such as care
employer's arbitrariness, whims, caprices or suspicion; and protection, and handling or custody of the
otherwise, the employee would eternally remain at the employer's property. In this case, an Auditor would be
mercy of the employer. one such employee.
Page 50 of 124
The basis for terminating the employment of petitioner employer

actually came from petitioner himself due to the
substantial and irreconcilable inconsistencies in the
narration of facts in his Audit Report and his Sagot na Misconduct improper or wrong conduct, the
Sinumpaang Salaysay filed before the company, and transgression of some established or definite
his pleadings before the lower tribunals and before this rule of action, a forbidden act, a dereliction of
Court. In sum, it cannot be denied that he withheld duty, willful in character, implying a wrongful
this information from his immediate supervisor and intent and not mere error in judgment.
from the company a clear breach of the trust and Misconduct must be of such a grave and
confidence the company had reposed in him as one of
aggravated character and not merely trivial or
its Auditors.
unimportant. It must be connected with the
work of the employee to constitute just cause.
4. Commission of Crime Examples of serious misconduct: sexual
Art. 282. d. Commission of a crime or offense by the harassment and falsification of time card.
employee against the person of his employer or any
immediate member of his family or his duly authorized Willful disobedience the orders or
representatives; and instructions of the employer must be
1) reasonable and lawful
2) sufficiently known to the employee
5. Analogous Causes 3) in connection with employees duties
(substantial matters)
Art. 282. e. Other causes analogous to the foregoing.
Where an order or rule is not reasonable, a
refusal to obey does not constitute a just
cause for the employees discharge.
AZUCENA:
A policy prohibiting an employee from having a
The employers right to freely select or
relationship with an employee of a competitor
discharge his employees is subject to
company is a valid exercise of management
regulation by the State through its police
prerogative. The employer has a right to guard
power.
Differences between just and authorized its trade secrets, manufacturing formulas,
causes: marketing strategies and other confidential
programs and information from competitors.
Just cause Authorized cause Refusal to Transfer as a rule, an employee
Refer to faults, Refer to business or should obey an employers order to transfer
misdeeds of the economic reasons from one job assignment or one location to
employee another. The transfer order must be lawful and
reasonable, on the other hand. It should also
Employer not Employer required to pay
not result in demotion in rank or diminution of
liable for separation pay, except in
pay and privileges.
separation pay (? case of closure or
Inconvenience to the employee does not
in all instances?) cessation of operation
justify disobedience to the transfer order.
due to serious business
An employee cannot be promoted without his
losses.
consent.
Due process No hearing is needed but
consists in twin- notices to the employee Neglect of Duties the neglect of duties must
notice and hearing and to DOLE should be not only be gross but also habitual to
requirements given 30 days before the constitute a just cause for dismissal
separation Gross neglect means an absence of that
diligence that an ordinarily prudent man would
Effectivity date of Dismissal takes effect at
use in his own affairs
dismissal is least 30 days after the
determined by the notice
Page 51 of 124
Abandonment of job is a form of neglect of terminate him and the grounds relied upon
duty. To constitute abandonment, 2 requisites by the employer
must concur: Investigation or administrative hearing is
a. the failure to report for work or absence required in between the two notices.
without valid reason Employee must be given sufficient time to
b. a clear intention to sever the employer- enable him to explain his side.
employee relationship, manifested in overt Valid cause but invalid procedure:
acts. The latter is more determinative. o Wenphil doctrine dismissal valid, but
employer must pay indemnity
Fraud any act, omission, or concealment o Serrano modifies Wenphil dismissal
which involves a breach of legal duty, trust or valid, but employer must pay full
confidence justly reposed, and is injurious to backwages
another. The fraud, to constitute just cause, o Agabon replaces Serrano and partly
must be committed against the employer in restores Wenphil dismissal valid, but
connection with the employees work. employer must pay higher indemnity, not
full backwages
Loss of Confidence applies only to cases of o JAKA fine-tunes Agabon indemnity
employees who occupy positions of trust and varies as to cause
confidence, or where the employee is routinely Employer has burden of proving a lawful
charged with care and custody of employers cause for dismissal. Guilt of the employee may
money or property. be supported by substantial evidence only.
If employees occupy positions of Substantial evidence is more than mere
responsibility, the employers loss of trust and scintilla. It means such relevant evidence as a
confidence on said employees may justify the reasonable mind might accept as adequate to
termination of their employment. But if they support a conclusion.
are rank-and-file workers, there must be proof
that they are involved in the loss of company Preventive suspension justified where the
property. employees continued employment poses a
serious and imminent threat to the life or
Commission of a Crime or Offense the property of the employer and co-workers. It is
immediate members of the family are limited not a penalty but an incident to investigation.
to spouse, ascendants, descendants, or Maximum period is 30 days. Beyond this,
legitimate, natural or adopted brothers or there is constructive dismissal.
sisters of the employer or of his relative by Dismissal is the supreme penalty and if it is
affinity in the same degrees (within the fourth avoidable, or where a penalty less punitive
degree of consanguinity) would suffice, without oppressing the
employer, dismissal should be avoided.
Demotion may be allowed as penalty.
Analogous Causes must be due to the An employee may be acquitted in a criminal
voluntary and/or willful act or omission of the case and yet his dismissal by the employee
employee may remain.
Drug use a ground for suspension or
termination of employee. Constructive dismissal involuntary resignation
Dismissal procedure for just cause requires resorted to when continued employment becomes
two written notices before dismissal: impossible, unreasonable or unlikely; when there is a
(1) initial notice charging the employee of the demotion in rank or a diminution in pay or when clear
particular acts or omissions that may discrimination, insensibility or disdain by the employer
cause his dismissal becomes unbearable.
(2) subsequent notice which informs the
employee of the employers decision to CATHEDRAL SCHOOL OF TECHNOLOGY V. NLRC
Page 52 of 124
is analogous to another if it is susceptible of

When Teresita Vallejera was informed of the negative comparison with the latter either in general or in some
reports about her complaints from employees and specific detail; or has a close relationship with the
students about her difficult personality and sour
latter.
disposition at work; she reacted violently to petitioner's
remarks and angrily offered to resign as she stormed Gross inefficiency is closely related to gross
out of the office in discourteous disregard and callous neglect, for both involve specific acts of omission on
defiance of authority. She was later terminated. the part of the employee resulting in damage to the
There is a just cause for termination. The reason for employer or to his business. Jurisprudence holds that
which is her unreasonable behavior and unpleasant failure to observe prescribed standards of work, or to
deportment in dealing with the people she closely fulfill reasonable work assignments due to inefficiency
works with in the course of her employment, is
may constitute just cause for dismissal.
analogous to the other "just causes" enumerated
under the Art 282 of the Labor Code. HOWEVER, Lims dismissal was still not justified given
that her termination is both substantively and
procedurally flawed for being violative of due process
An employer cannot legally be compelled to continue
with the employment of a person who admittedly was and therefore, null and void.
guilty of misfeasance or malfeasance towards his GENUINO v. NLRC
employer, and whose continuance in the service of the
latter is patently inimical to his interests. The law, in
protecting the rights of the laborer, authorizes neither Genuino was found to have used "facilities of
oppression nor self-destruction of the employer. Genuino's family corporation, namely, Global Pacific,
personally and actively participated in the diversion of
bank clients' funds to products of other companies that
There can be no award for backwages where the yielded interests higher than what Citibank products
employee's dismissal was for a just cause, it would be offered, and that Genuino and Santos realized
neither fair to allow the employee to recover something substantial financial gains, all in violation of existing
he has not earned or could not have earned. company policy and the Corporation Code.
LIM v. NLRC (1996) WON the dismissal of Genuino is for a just cause and
Petitioner Lim was employed with PEPSI. At the time in accordance with due process.
of her dismissal, she held the position of Staff *The dismissal was for just cause but lacked due
Accountant. As per company policy, PEPSI regularly process.
evaluated its employees performance
As a result of the unfavorable evaluation of Lim, While the bank gave Genuino an opportunity to deny
PEPSI asked the petitioner to voluntarily resign and the truth of the allegations in writing and participate in
offered to pay her termination benefits. Petitioner Lim the administrative investigation, the fact remains that
the charges were too general to enable Genuino to
however refused. Subsequently, petitioner was
intelligently and adequately prepare her defense.
verbally informed of her termination as an employee of
PEPSI. Afterwards, petitioner received a Termination
Letter from PEPSI advising her of the companys While we hold that Citibank failed to observe
decision to terminate her services for gross procedural due process, we nevertheless find
inefficiency. Genuino's dismissal justified.
WON gross inefficiency is among the just causes

prescribed by law for the dismissal of an employee c. Other Causes
YES, gross inefficiency falls within the purview of

other causes analogous to the foregoing, and 1. Abandonment
constitutes, therefore, just cause to terminate an
employee under Article 282 of the Labor Code. One
Page 53 of 124
RBC CABLE MASTER SYSTEM v. MARCIAL served a penalty of suspension for his infractions and
BALUYOT violations as well as the petitioners tacit condonation
of the infractions he committed, by permitting him to go
back to work and by asking him to execute a
Petitioner RBC Cable Master System (petitioner RBC) promissory note. Secondly, there was no proof that
is a cable firm engaged in the business of providing petitioner sent private respondent a notice of
home cable service, owned and managed by Engr. termination on the ground of abandonment, if indeed it
Reynaldo Cinense and his wife, co-petitioner Evelyn is true that he really failed to go back to work. Section
Cinense. RBC hired herein private respondent Marcial 2, Rule XVI, Book V, Rules and regulations
Baluyot as a Lineman. In 1999, private respondent implementing the Labor Code provides that any
was appointed as collector, which position he held up employer who seeks to dismiss a worker shall furnish
to March 2001 when he was allegedly illegally him a written notice stating the particular act or
dismissed. On February 1, 2001, when private omission constituting the ground for his dismissal. In
respondent reported for work, he was informed that no cases of abandonment of work, the notice shall be
blank official receipts could be issued to him for his served at the workers last known address For this
collection job for that day or for a month because he is reason, the SC was constrained to give credence to
being suspended. Thus, for one month, he did not private respondents assertion that he attempted to
report for work and when he reported back to duty, he report back to work but he was just asked to leave as
was told by petitioner RBC that he is now out of job he was considered terminated. And lastly, private
and is considered terminated. respondents filing of a case for illegal dismissal with
the labor arbiter negates abandonment.
Petitioner RBC denied dismissing private respondent

by contending that it was private respondent who PADILLA MACHINE SHOP V. JAVILGAS (2008)
abandoned his work, when, sometime in March 2001,
he left without any notice and never returned back for
work.
Javilgas was an employee of Padilla Machine Shop.
He complained that his employer was not remitting the
WON Respondent was validly dismissed due to contributions to SSS. He was transferred to a different
abandonment branch and was later told by his employer to stop
No. Respondent did not abandon his job to begin working without giving any reason. Javilgas filed a
with. complaint for illegal dismissal.
WON the employer was able to prove that Javilgas
To constitute abandonment, two elements must abandoned his work? NO.
concur: (1) the failure to report for work or absence For abandonment to exist, it is essential to prove:
without valid or justifiable reason, and (2) a clear
intention to sever the employer-employee relationship, 1. That the employee failed to report for work or was
with the second element as the more determinative absent without valid or justifiable reason; and
factor and being manifested by some overt acts. Mere
absence is not sufficient. The employer has the burden 2. That as manifested by overt acts, there was a clear
of proof to show a deliberate and unjustified refusal of intention to sever the employer-employee relationship.
the employee to resume his employment without any The establishment of his own shop is not enough proof
intention of returning.
that Javilgas intended to sever his relationship with his
employer.
The evidence in the case at bar shows that respondent The employer consistently denied that Javilgas was
has always humbly accepted his fault and asked for
dismissed from service and claimed that Javilgas
petitioners forgiveness.
abandoned his employment. But denial, in this case,
does not suffice; it should be coupled with evidence to
In the case at bar, the charge of abandonment is support it. The employer failed to adduce evidence to
belied by the following circumstances: First, the high rebut Javilgas claim of dismissal and to satisfy the
improbability of private respondent to intentionally burden of proof required.
abandon his work considering that he had already
Page 54 of 124
2. Courtesy Resignation them on a piece-rate or task basis. They then filed a

petition for illegal dismissal.
BATONGBACAL v. ASSOCIATED BANK

The doctrine laid down in the case of Mobil Employees
Batongbacal was employed as VP by the Citizens Association v. NLRC cannot be applied in this case as
Bank and Trust Company which then merged with it involves termination of employment under ART 283
Associated Bank (AB). He retained his position within of the Labor Code and not termination of employment
AB as VP. More than 6 years later, he learned that his as a result of a change in ownership. The corporation
itself, as a distinct and separate entity continues to
salary and allowances was considerably lower than
exist.
the other AB VPs and even lesser than the other
lower-level employees. He wrote the Board for the A change of ownership is not proscribed by law. As
held in the case of Central Azucena del Danao v. CA,
deficiency in his pay, but the Board ignored his letters
change in ownership is part of the management
and then promulgated a memo demanding that certain prerogative of the employer, which may bring about
employees submit their courtesy resignations which he dismissal or termination of its employees in the
did not submit. However, AB sent him a letter process. Such prerogative, however, must be done in
accepting his resignation and stopped paying him his good faith.
remuneration. In the present case, the change of ownership of the
WON Petitioner was validly dismissed on the basis of management was done bona fide. The petitioners
freely and voluntarily accepted their separation pay
courtesy resignations.
and other benefits and individually executed the
It is true that the bank was in dire financial straits at Release or Waiver.
the time that it required it senior executives to submit
their courtesy resignations, however, in doing so, it
ELCEE FARMS vs. NLRC
forced upon its employees an act which they
themselves should voluntarily do. It should be
emphasized that resignation per se means voluntary Private respondents worked in the hacienda of Elcee
relinquishment of a position or office. Adding the word Farms. Elcee Farms entered into a Lease Agreement
courtesy did not change the essence of resignation. with Garnele Corp; however, most of the private
There is no guarantee that all employers will not use it respondents continued to work in Hacienda Trinidad.
Garnele sub-leased the hacienda to Daniel Hilado.
to rid themselves arbitrarily of employees they do not
Private respondents were allowed to continue working
like, in the guise of streamlining its organization. On in Hacienda Trinidad, under the management of
the other hand, employees would be unduly exposed HILLA. They were terminated by Hilla when they
to outright termination of employment which is refused to join the labor union, as provided under the
anathema to the constitutional mandate of security of closed shop provisi
tenure. Private respondent asserts that petitioners
refusal to submit his letter of courtesy resignation was
sufficient reason to distrust him. Loss of confidence
as a ground for dismissal must be supported by The er-ee relationship between Elcee and
complainants had not been terminated when the
satisfactory evidence. There are no proofs of former entered into a Lease contract with Garnele, as
malfeasance or misfeasance committed by petitioner indicated by payroll and SSS Forms. The er-ee
which jeopardized private respondents interest. relationship between the farm workers and Elcee was
severed only when Garnele, acting in behalf of Elcee
3. Change of Ownership
Farms, entered into a lease agreement with Daniel
Hilado and, thereafter, Hilla took over the management
of the Hacienda in November 1990.
MANLIMOS v. NLRC
The petitioners were among the regular employees of
the Super Mahogany Plywood Corporation. It was Respondents are entitled to separation pay. The lease
subsequently owned by the private respondent, which to Daniel Hilado effectively terminated the er-ee
terminated the services of the petitioners and rehired relationship between Elcee Farms and the
Page 55 of 124
farmworkers. However, in Abella v. NLRC, the Court No. Willful disobedience can be a valid cause for
ruled that an employer whose lease agreement had dismissal of 2 elements must concur: (1) employees
already expired, and therefore no longer manages and conduct must be characterized by a wrongful and
controls the hacienda, is still required to pay the
perverse attitude; and (2) the order violated must have
separation pay due to its former employees in
connection with their employment with such employer, been reasonable, lawful, made known to the
even if the said employees were terminated by the employee, and must pertain to the duties which he had
new employer. been engaged to discharge. The 2nd element is
obviously present since petitioners business is a
printing press whose production schedule is
4. Habitual absenteeism/tardiness sometimes flexible and varying. The 1st is also present
because despite his knowledge that there is a
production deadline that needs to be met, and that
MANILA ELECTRIC CO. v. NLRC
without him, the offset machine operator, no further
Respondent Cortez was employed by Meralco as printing can be had, he refused to provide overtime
lineman-driver. His employment was characterized by work. This shows perverse and wrongful mental
his perennial suspension from work due to his attitude.
unauthorized absences and violation of the companys
sick leave policy. A recent incident, wherein he
absented himself without prior notice from his
superiors for more than a month gave rise to an 5. Fixed-term Employment
administrative investigation. Cortez was terminated on
the ground of gross neglect of duties.
Was Cortez dismissal valid? YES. MEDENILLA v. PVB
Cortez dismissal was a valid exercise of management

prerogative which includes the regulation of manpower Employees hired for a temporary basis and stipulated
by the ER. So long as management prerogatives are that they could be terminated if found unqualified for
exercised in good faith for the advancement of the the work. They were later terminated to reduce costs
ERs interest and not for the purpose of circumventing and expenses in the industry.
or defeating the rights of EEs, such exercise must be
Employees were terminated for reasons not covered
upheld. Cortez unexplained and unauthorized
by the agreed contract. It is the employers burden to
absences prejudiced his ER as the very nature of
prove the validity of their dismissal. Here they could
Cortez job (public service) requires his physical
not refute proof of an invalid dismissal because it was
presence to be able to minister to the incessant
for reasons not covered by the employment contract.
complaints of Meralcos customers.
RB MICHAEL PRESS v. GALIT
Respondent was ordered to render overtime service in

order to comply with a job order deadline, but he PAMANTASAN v. CSC
refused to do so. The following day, respondent
reported for work but petitioner Escobia told him not to
work, and to return later in the afternoon for a hearing. Sixteen (16) individual private respondents were full-
When he returned, a copy of an Office Memorandum time instructors of PLM under "temporary contracts" of
was served on him. The next day, respondent was employment renewable on a yearly basis.
terminated. Issue: WON respondent is illegally
dismissed.
Uniform notices of termination were individually sent to
private respondents informing them of "the expiration
of their temporary appointments and the non-renewal
Page 56 of 124
of their appointments for the school year (SY) 1990- 1. granting unauthorized premium/free goods to
1991. and unauthorized pull-outs from customers
(guilty)
2. dishonesty in connection with the Rewards of
A series of letter-complaints addressed to the CSC by
Learning (ROL) test, his test was answered by
private respondents evoked a letter response from
his secretary (guilty)
PLM, traversing the complainants' right to compel a
renewal of the appointments. They were advised that 3. discrepancies between the number of product
their retention was not recommended by their samples recorded in his Daily/Weekly
respective Deans. Coverage Report (DCR) and the number of
product samples found in his possession
(subject of present petition, was found guilty
Private respondents, through PLMFO, filed with the by petitioner)
CSC a verified complaint for illegal dismissal and
4. Upon the preventive suspension, he failed to
unfair labor practice against petitioner and its officers.
turnover his company vehicle (subject of
present petition, was found guilty by petitioner)
The conclusion of the PSLMC regarding petitioner's
alleged commission of unfair labor practice against
Respondent was fired due to the above grounds (both
private respondents can no longer be considered a
the past offenses and the present offenses).
proper issue either before the CSC or in this instance
since this particular matter has already been adjudged
with finality in accordance with the Court's resolution. The rule for past offenses:
While a penalty may no longer be imposed on
The finding of the PSLMC that the non-renewal by offenses for which respondent has already been
petitioner of the questioned contracts of employment punished, these offenses, among other offenses, may
had been motivated by private respondents' union still be used as justification for an employees
activities is conclusive on the parties. dismissal. This is the reason why the court still
examined the past offenses of the respondent which
were cited by the petitioner.
The Court's resolution (PLM vs. PSLMC, et al), which
has long become final and executory should now
render that matter a fait accompli. In termination cases, the burden of proof rests on the
employer to show that the dismissal was for a just and
valid cause. The court held that the petitioner was not
When the case was thus referred to the CSC by the able to prove that the respondent acted with
PSLMC to take "appropriate action" it understandably dishonesty in failing to report the proper number of
meant that the CSC should take the necessary steps samples in his possession. It also held that while the
of reinstating the illegally dismissed employees. past offenses of the petitioner where of dishonesty and
such is frowned upon, the penalty of dismissal is
excessive. The court also said that the employers
6. Past Offenses prerogative to discipline its employee must be
exercised without abuse of discretion. It held that
Respondents violations of petitioners Code of
JANSSEN PHARMA v B. SILARYO Conduct, even if taken as a whole, would not fall under
the just causes of termination provided under Article
282 of the Labor Code.
Respondent is an award winning Territory/Medical
Representative, however, on the dark side, respondent
was also investigated for, and in some cases found RAMORAN v JARDINE CMG LIFE INSURANCE
guilty of, several administrative charges.
Ramoran was terminated from employment due to

The administrative charges were as follows: irregularities in her OT authorization slips. Jardine filed
a criminal complaint against her for falsification of
Page 57 of 124
private documents. She was acquitted and claims for petitioner. His dismissal from the service is, therefore,
reinstatement. in order. A series of irregularities when put together
may constitute serious misconduct, which under Article
Dismissal on the basis of loss of trust and confidence 282 of the Labor Code, as amended, is a just cause
calls for substantial evidence only the amount of for dismissal.
relevant evidence which a reasonable mind might 8. Immorality
accept as adequate to justify a conclusion. It does not
demand proof beyond reasonable doubt of the
employees misconduct.
SANTOS v. NLRC
The fact that the employee has been absolved in a

criminal prosecution involving said misconduct does School administration confirmed a rumor about two
not preclude the employer from attempting to prove teachers having an illicit relationship with each other
the same before the labor arbiter or the latter from outside of each of their marriages. Both of them were
accepting that evidence as sufficient foundation for a dismissed.
finding of lawful termination from employment.
WON immorality can be a ground for dismissal. Yes.
7. Habitual Infractions Under Article 282 of the Labor Code, as amended, the
following are deemed just causes to terminate an
employee: (a) Serious misconduct or willful
GUSTILO v. WYETH (2004) disobedience by the employee of the lawful orders of
his employer or representative in connection with his
Alan D. Gustilo, petitioner, was employed by Wyeth work; (b) Gross and habitual neglect by the employee
Philippines, Inc., respondent company, as a of his duties: (c) Fraud or willfull breach by the
pharmaceutical territory manager placed in various employee of the trust reposed in him by his employer
branches. Petitioners employment records show that or duly authorized representative; (d) Commission of a
crime or offense by the employee against the person
respondent company, on various dates, reprimanded
of his employer or any immediate member of his family
and suspended him for habitually neglecting to submit or his duly authorize representative; and (e) Other
his periodic reports. causes analogous to the foregoing.
Subsequently, Wyeth placed petitioner in charge of
promoting four (4) Lederle pharmaceutical products. Moreover, it is provided under Section 94 of the
Petitioner failed to meet the objectives he committed Manual of Regulations for Private Schools: Section
to, prompting respondent company to send him two (2) 94. Causes of Terminating Employment. In addition to
separate notices charging him with willful violation of the just cases enumerated in the Labor Code, the
company rules and regulations and directing him to employment of school personnels, including faculty,
submit a written explanation. On May 22, 1996, upon may be terminated for any of the following causes: E.
Disgraceful or immoral conduct.
recommendation of a Review Panel, respondent
company terminated the services of petitioner.
WON there was a valid ground for the dismissal of
Gustillo 9. Measure of Penalty
YES, Gustillo was validly dismissed given that he is a
habitual offender whose numerous contraventions of
SMC v. NLRC (2009)
company rules has left Wyeth with no choice but to
terminate his services.
Records show the various violations of respondent Respondent William L. Friend, Jr. was a route
companys rules and regulations committed by salesman of petitioner San Miguel Corporation Bacoor
Sales Office for ten (10) years. On April 3, 1995, Rene
Page 58 of 124
de Jesus, respondents supervisor, conducted an audit suspension. In this case, employee did not benefit
of his route on account of complaints by some from his acts, so that the proper penalty should only be
customers. These customers complained to the suspension.
supervisor that respondent padded their accounts in
the total amount of P20,540.00. After the audit, the
supervisor found reasonable ground to hold 10. Conviction or Commission of a Crime
respondent liable for misappropriation of company
funds through falsification of private documents. On
April 19, 1995, respondent was summoned to SAMPAGUITA GARMENTS CORP V. NLRC (1994)
petitioners Canlubang Bottling Plant for investigation.
Respondent then received a notice of termination from
petitioner, based on his acts of falsification. Hence, Santos is an employee of Sampaguita Garments Corp.
respondent filed a case for illegal dismissal.
It was alleged that Santos attempted to bring out of the
company premises, a piece of cloth belonging to the
WON respondents dismissal was valid company. Sampaguita dismissed Santos who filed a
NO, such penalty was not warranted, and too complaint for illegal dismissal. The Labor Arbiter ruled
severe. in favor of the company. NLRC reversed. SC affirmed
NLRC and ordered Santos reinstatement.
Court affirmed the LA and CA decisions in ruling in

favor of respondent. It conceded that the acts In the meantime, Sampaguita filed a criminal case of
committed by respondent in fact amounted to theft against Santos. MTC convicted Santos. RTC, CA,
falsification, and were indeed violations of company
and SC affirmed the conviction.
policy. However, the LA found that such acts were
done by respondent so that his customers account
will not "slide" for if it happens, the customers credit
line would be cut-off. In fine, it gives the customer Both decisions in the labor case and the criminal case
more time to pay his/her account to SMC. The Court became final and executory. Hence, we have a
pointed out that if in the said acts, it was found that situation where the SC ordered that a dismissed
respondent benefitted, pursuant to company policy, he employee be reinstated, but the same Court found that
could have been validly dismissed. However, to LA, it said employee was guilty of theft.
was not proved that respondent benefitted. The
padding was merely for the purpose of maintaining the
line account of complainants clients. The Court
In this case, the Court ruled that Santos should no
agreed further with the LA when it held that the
penalty of dismissal was too severe a penalty for longer be reinstated. The affirmance of Santos
the offense committed. Firstly, there is no showing conviction of theft is a supervening event or cause that
that complainants service record was replete with rendered unjust and inequitable the decision
offenses. It appears that it was the first time he mandating Santos reinstatement.
was charged of violation of company rule.
Secondly, there is no convincing evidence that he
materially benefited from the acts committed. WON Santos is entitled to separation pay and/or
Thirdly, SMC did not suffer from any damage or backwages? NO.
losses by reason thereof.
The paper renewal committed by respondent may be The award of separation pay and/or backwages is not
considered as falsification, but we agree with the justifiable because Santos was found guilty of a crime
Labor Arbiter and the CA that such paper renewal did involving moral turpitude and so is disqualified from
not amount to misappropriation that could justify the benefits claimed. A contrary ruling would have the
outright dismissal for the first offense, as what effect of rewarding rather than punishing the erring
petitioner did to respondent. In the relevant company employee for his offense.
policy, it distinguished whether the employee
benefitted from his falsifying. If he did, that would
warrant dismissal. IF he did not, it would only warrant
Page 59 of 124
an error in judgment. The misconduct to be serious

within the meaning of the Act must be of such a grave
BUGHAW V. TREASURE ISLAND INDUSTRIAL
and aggravated character and not merely trivial or
Bughaw was employed with Treasure Island which unimportant. Such misconduct, however serious, must
during that time had received several reports that the nevertheless, in connection with the work of the
many of its workers were using drugs during working employee, constitute just cause for his separation.
hours and within the company premises. They caught Loberanes statements given to police during
one employee in possession of shabu who implicated investigation is evidence which can be considered by
Bughaw. He was then preventively suspended and the the respondent against the Bughaw.
management demanded that he appear before the
Bughaw failed to controvert Loberanes' claim that he
companys legal counsel to explain why he should not
too was using illegal drugs.
be dismissed. Twice he failed to do so and the
company was forced to dismiss him.
WoN Bughaw was illegally dismissed from 11. Qualification Requirements
employment considering that the LA and the NLRC
ruled differently on the matter.
No, he was not. Substantial evidence: such
amount of relevant evidence which a reasonable mind
might accept as adequate to support a conclusion,
even if other equally reasonable minds might
ST LUKES MEDICAL CENTER
conceivably opine otherwise
EMPLOYEES ASSOCIATION-AFW v. NLRC
Under the Labor Code, there are 2 requirements for
the lawful dismissal of an employee: the substantive
and the procedural aspects. X-ray technician did not pass and refused to take the
licensure exam was validly terminated by employer.
a. The legality of the dismissal (the dismissal must be
The exercise of the right of workers to security of
under any of the just causes provided under Article
tenure may be reasonably regulated pursuant to the
282 of the Labor Code)
police power of the State to safeguard morals, peace,
b. The legality of the manner of dismissal (that there education, order, safety and the general welfare of the
must be observance of the requirements of due people. The legislative intent of RA 7431 is to protect
process, otherwise known as the two-notice rule) the public from the hazards posed by radiation as well
Not only must the dismissal be for a just or authorized as to ensure the safe and proper diagnosis, treatment
cause, the rudimentary requirements of due process - and research thru the application of machines using
notice and hearing - must, be observed before an radiation. The state is justified in prescribing the
employee may be dismissed. requirement. Santos continued employment without
the requisite certificate would have exposed the
Without the concurrence of the two, the termination hospital to possible sanctions and even to a revocation
would, in the eyes of the law, be illegal, for of its license.
employment is a property right of which one cannot be
deprived of without due process.
The charge of drug abuse inside the company's
premises and during working hours against Bughaw d. Constructive Dismissal
constitutes serious misconduct, which is one of the just
causes for termination.
ENDICO v. QUANTUM FOODS DISTRIBUTION
Misconduct: improper or wrong conduct. It is the CENTER
transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, wilful in
character, and implies wrongful intent and not merely
Page 60 of 124
The petitioner was a Field Supervisor who was re-

assigned to the main office pending investigation of an
alleged misconduct. He then filed a complaint for WESTMONT vs. SAMANIEGO
illegal dismissal alleging constructive dismissal.
Pending investigation of a controversy that involved
In the pursuit of its legitimate business interests, his subordinates, Samaniego was transferred to Metro
especially during adverse business conditions, Manila. He was then placed on a floating status and
management has the prerogative to transfer or assign assigned to perform duties not connected with his
employees from one office or area of operation to position. The transfer resulted in diminution of his
another, provided there is no demotion in rank or salary.
diminution of salary, benefits and other privileges and
the action is not motivated by discrimination, bad faith,
Samaniego was constructively dismissed. In
or effected as a form of punishment or demotion
constructive dismissal, the employer has the burden of
without sufficient cause. This privilege is inherent in
proving that the transfer of an employee is for just and
the right of employers to control and manage their
valid grounds, such as genuine business necessity.
enterprises effectively. The right of employees to
The employer must be able to show that the transfer is
security of tenure does not give them vested rights to
not unreasonable, inconvenient, or prejudicial to the
their positions to the extent of depriving management
employee. It must not involve a demotion in rank or a
of its prerogative to change their assignments or to
diminution of salary and other benefits. If the employer
transfer them.
cannot overcome this burden of proof, the employees
transfer shall be tantamount to unlawful constructive
dismissal.
UNIWIDE SALES WAREHOUSE CLUB V. NLRC

Employee sent memorandum seeking an explanation
regarding the incidents for alleged irregularities such SMC V. ANGEL PONTILLAS
as allowing the entry of unauthorized persons inside a Pontillas was a security guard employed by SMC. He
restricted area during non-office hours, falsification of belonged to the Oro Verde Warehouse. The company
or inducing another employee to falsify personnel or issued a Memo regarding the newly-organized VisMin
company records, sleeping and allowing a non- Logistics Operations which was the result of the
employee to sleep inside the private office, integration/merging of the functions and assets of the
unauthorized search and bringing out of company Materials Management and the Physical Distribution
records, purchase of damaged home furnishing items Group. The security guards were then to be
without the approval from superior, taking advantage transferred to said VisMin Logistics Ops. Pontillas
of buying damaged items in large quantity, alteration of however to refused to acknowledge the guard detail
approval slips for the purchase of damaged items and issued by his new superior and instead continued to
abandonment of work. She was dismissed, and filed report at the Oro Verde Warehouse. He was dismissed
illegal dismissal. for willful disobedience of the lawful orders of his
With respect to rank-and-file personnel, loss of trust employer in connection with his work.
and confidence as ground for valid dismissal requires Was his dismissal valid? Yes.
proof of involvement in the alleged events in question,
Pontillas was dismissed for just cause; he was not
and that mere uncorroborated assertions and
singled out rather and his transfer was the effect of
accusations by the employer will not be sufficient. But,
said integration. The employer exercises the
as regards a managerial employee, mere existence
prerogative to transfer an employee for valid reasons
of a basis for believing that such employee has
and according to the requirements of its business,
breached the trust of his employer would suffice
provided the transfer does not result in demotion in
for his dismissal.
rank or diminution of the employee's salary, benefits,
and other privileges. Here, the order of transfer was
e. Transfer reasonable and lawful considering the integration of
Page 61 of 124
Oro Verde Warehouse with VisMin Logistics

Operations. There was no demotion involved, or even SECTION 4. Period of suspension. No preventive
a diminution of his salary, benefits, and other suspension shall last longer than 30 days. The
privileges. Respondent's persistent refusal to obey employer shall thereafter reinstate the worker in his
petitioner's lawful order amounts to willful former or in a substantially equivalent position or the
disobedience under Article 282 of the Labor Code. employer may extend the period of suspension
provided that during the period of extension, he pays
Willful disobedience requires the concurrence of two the wages and other benefits due to the worker. In
elements: (1) the employee's assailed conduct must such case, the worker shall not be bound to reimburse
have been willful, that is, characterized by a wrongful the amount paid to him during the extension if the
and perverse attitude; and (2) the order violated must employer decides, after completion of the hearing, to
dismiss the worker.
have been reasonable, lawful, made known to the
employee, and must pertain to the duties which he had
been engaged to discharge. GATBONTON v. NLRC
HERIDA v. F & C PAWNSHOP AND JEWELRY Petitioner Renato S. Gatbonton is an associate

STORE professor of respondent Mapua Institute of
Technology (MIT). Some time in November 1998, a
civil engineering student of respondent MIT filed a
letter-complaint against petitioner for unfair/unjust
grading system, sexual harassment and conduct
f. Promotion unbecoming of an academician.
Pending investigation of the complaint, respondent
MIT, through its Committee on Decorum and
PHIL. TELEGRAPH V. CA
Investigation placed petitioner under a 30-day
Employers ordered a restructuring and relocation preventive suspension effective January 11, 1999.
program for the company sending different employees
WoN the preventive suspension was illegal?
to different places. The employees refused the
transfers, despite of the fact that they would technically Petition is partly meritorious.
be promotions. They were fired and subsequently Preventive suspension is a disciplinary measure for
sued for illegal dismissal. the protection of the companys property pending
An employee cannot be promoted even if merely as a investigation of any alleged malfeasance or
result of a transfer without his consent. There is no law misfeasance committed by the employee.
that compels an employee to accept a promotion for Petitioners preventive suspension was based on
the reason that it is in the nature of a gift or reward. So respondent MITs Rules and Regulations for the
employees could not be penalized for not accepting Implemention of the Anti-Sexual Harassment Act of
the promotions. 1995, or R.A. No. 7877.
The Mapua rules did not comply with the requirement
g. Preventive Suspension of publication rules and regulation. In Tanada v
Tuvera, Administrative rules and regulations
must also be published if their purpose is to
Omnibus Rules, Book V, Rule XIV, Sec 2-3 enforce or implement existing law pursuant also
SECTION 3. Preventive suspension. The employer to a valid delegation.
may place the worker concerned under preventive
suspension if his continued employment poses a In petitioners case, there is no indication that
serious and imminent threat to the life or property of petitioners preventive suspension may be based on
the employer or of his co-workers. the foregoing circumstances.
Page 62 of 124
Said resolution does not show that evidence of 2. Substantive Requirements Business Related
petitioners guilt is strong and that the school head is Causes
morally convinced that petitioners continued stay
during the period of investigation constitutes a
distraction to the normal operations of the institution; Art. 283. Closure of establishment and reduction of
or that petitioner poses a risk or danger to the life or personnel. The employer may also terminate the
employment of any employee due to the installation of
property of the other members of the educational
labor-saving devices, redundancy, retrenchment to
community. prevent losses or the closing or cessation of operation
As previously stated, there is nothing on record which of the establishment or undertaking unless the closing
shows that respondent MIT imposed the preventive is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers
suspension on petitioner as his continued
and the Ministry of Labor and Employment at least one
employment poses a serious threat to the life or (1) month before the intended date thereof. In case of
property of the employer or of his co-workers; termination due to the installation of labor-saving
therefore, his preventive suspension is not justified. devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month
PIDO v NLRC pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of
closures or cessation of operations of establishment or
Petitioner was a security guard who had an altercation undertaking not due to serious business losses or
with another employee. Because of such altercation, financial reverses, the separation pay shall be
he was suspended indefinitely for investigation. When equivalent to one (1) month pay or at least one-half
his suspension reached 9 months, he filed a case for (1/2) month pay for every year of service, whichever is
illegal dismissal as he asserted that he was higher. A fraction of at least six (6) months shall be
constructively dismissed. considered one (1) whole year.
The court held that petitioner was under prveventive

suspension. However, The allowable period of
suspension in such a case is not six months but only
a. Basis Employer Right
30 days, following Sections 8 and 9 of Rule XXIII,
Book V of the Omnibus Rules Implementing the Labor
Code. In the event the employer chooses to extend the
period of suspension, he is required to pay the wages
and other benefits due the worker and the worker is
not bound to reimburse the amount paid to him during
the extended period of suspension even if, after the EDGE APPAREL INC. v NLRC
completion of the hearing or investigation, the
employer decides to dismiss him.
Respondent did not inform petitioner that it was Due to its financial obligations and unabated losses,
extending its investigation, nor did it pay him his Edge Apparel was constrained to adopt and implement
wages and other benefits after the lapse of the 30-day a retrenchment program, which subsequently
period of suspension. Neither did respondent issue an dismissed private respondents from employment.
order lifting petitioners suspension, or any official
assignment, memorandum or detail order for him to
The employer has a right to dismiss employees for
assume his post or another post. Respondent merely
valid causes after proper observance of due process.
chose to dawdle with the investigation, in absolute
These valid causes are categorized into two groups,
disregard of petitioners welfare.
i.e., "just" causes under Article 282 of the Labor Code
and "authorized" causes under Articles 283 and 284.
The court ruled for the petitioner and remanded the
case for computation of his backwages, allowances,
etc.
Page 63 of 124
Redundancy exists where the services of an employee Worker by ACC. She later became a Guidance
are in excess of what would reasonably be demanded Assistant in the Guidance Department of ACC, and in
by the actual requirements of the enterprise 1997, became a regular employee.
In 2000, Garcia and Balla and 52 other employees
Retrenchment is an economic ground to reduce the were informed of the termination of their employment
number of employees. In order to be justified, the following the manpower review conducted by
termination of employment by reason of retrenchment
management in order to streamline its operation and
must be due to business losses or reverses which are
serious, actual and real. Retrenchment is normally the growth of the Organization.
resorted to by management during periods of business
reverses and economic difficulties occasioned by such WON retrenchment may be considered as a basis
events as recession, industrial depression, or seasonal
of terminating the services of Garcia and Balla
fluctuations. It is an act of the employer of reducing the
work force because of losses in the operation of the NO, ACC has miserably failed to prove that there was
enterprise, lack of work, or considerable reduction on a valid retrenchment. Retrenchment is the termination
the volume of business. Retrenchment is, in many of employment effected by management during
ways, a measure of last resort when other less drastic
periods of business recession, industrial depression,
means have been tried and found to be inadequate
seasonal fluctuations, lack of work or considerable
reduction in the volume of the employer's business.
The general standards or elements needed for the Resorted to by an employer to avoid or minimize
retrenchment to be valid - i.e., that the losses expected business losses, it is a management prerogative
are substantial and not merely de minimis in extent; consistently recognized by this Court.
that the expected losses are reasonably imminent; that
the retrenchment is reasonably necessary and likely to There are three basic requisites for a valid
effectively prevent the expected losses; and that the retrenchment to exist, to wit:
imminent losses sought to be forestalled are
substantiated were adequately shown (a) The retrenchment is
necessary to prevent losses and such losses are
proven;
The law acknowledges the right of every business (b) Written notice to the
entity to reduce its work force if such measure is made employees and to the DOLE at least one (1)
necessary or compelled by economic factors that month prior to the intended date of retrenchment;
would otherwise endanger its stability or existence. and
(c) Payment of separation pay
b. Business-related or Authorized Causes equivalent to one (1) month pay or at least one-
half (1/2) month pay for every year of service,
whichever is higher.
1. Installation of Labor Saving Devices
To justify retrenchment, the employer must prove
serious business losses. The "loss" referred to in
2. Retrenchment to Prevent Losses
Article 283 cannot be just any kind or amount of loss;
otherwise, a company could easily feign excuses to
suit its whims and prejudices or to rid itself of
unwanted employees.
AMA COLLEGE v. GARCIA (2008) The necessary conditions for the company losses to
Garcia was hired as a janitress by ACC, thereafter her justify retrenchment:
employment status was changed to probationary (1) The losses incurred are
Library Aide. She became a regular employee in substantial and not de minimis;
1990. On the other hand, Balla was hired as a Social
Page 64 of 124
(2) The losses are actual or a step which proved not adequate to stem business
reasonably imminent; reverses. Hence, after holding special labor-
management meetings with the hourly union, MMPC
(3) The retrenchment is
launched a temporary lay-off program to cover some
reasonably necessary and is likely to be effective
170 hourly employees. This batch included Alfredo
in preventing the expected losses; and
who, sometime in January 1999, received a letter
(4) The alleged losses, if already dated December 19, 1998, informing him of the
incurred, or the expected imminent losses sought temporary suspension of his employment, inclusive of
to be forestalled, are proven by sufficient and benefits. As there indicated, the temporary lay-off
convincing evidence. scheme, initiated due to continuing business
contraction, was for six months from January 4 to July
2, 1999. In the interim, MMPC updated the
FLIGHT ATTENDANTS AND STEWARDS temporarily-suspended Alfredo, et al. of its business
ASSOCIATION OF THE PHILIPPINES vs condition. As later events unfolded, the temporary lay-
PHILIPPINE AIRLINES off move was still not enough to avert further losses.
This development impelled MMPC to embark on
another retrenchment program affecting the hourly
Flight attendants were retrenched due to alleged employees. Accordingly, on May 31, 1999, MMPC sent
business losses. Management kept on changing plans separate notices to Alfredo and other affected
how many staff were to be dismissed. personnel advising them of their permanent lay-off, but
with retrenchment benefits, effective July 2, 1999. The
drop in company sales and market share was the
WON retrenchment, in this case, was illegal. Yes. stated reason for MMPCs latest move. Alfredo filed a
case for illegal dismissal and damages.
Retrenchment is only a measure of last resort, when
other less drastic means have been tried and found to WON Alfredo was illegally dismissed
be inadequate. The burden clearly falls upon the
employer to prove economic or business losses with No. He was not illegally dismissed. His dismissal
sufficient supporting evidence. Its failure to prove was to prevent losses.
these reverses or losses necessarily means that the
employees dismissal was not justified. Any claim of
actual or potential business losses must satisfy certain The right of management to retrench or to lay-off
established standards, all of which must concur, before workers to meet clear and continuing economic threats
any reduction of personnel becomes legal. The Court or during periods of economic recession to prevent
found that PAL had implemented its retrenchment losses is recognized by Article 283 of the Labor Code.
program in an arbitrary manner and with evident bad Jurisprudence teaches that the requirements for a
faith, which prejudiced the tenurial rights of the cabin valid retrenchment are: (1) that the retrenchment is
crew personnel. reasonably necessary and likely to prevent business
losses which, if already incurred, are not merely de
minimis, but substantial, serious, and real, or only if
MENDROS V. MITSUBISHI MOTORS expected, are reasonably imminent as perceived
objectively and in good faith by the employer; (2) that
the employer serves written notice both to the
Mitsubishi Motors Philippines Corporation (MMPC) employees concerned and the DOLE at least a month
hired petitioner Alfredo A. Mendros, Jr. as regular body before the intended date of retrenchment; (3) that the
prepman, later promoting him as assembler major in employer pays the retrenched employee separation
the companys manufacturing division. Due to the pay in an amount prescribed by the Code; (4) that the
severe slump of its vehicle sales brought about by the employer exercises its prerogative to retrench in good
Asian financial crisis in 1997, MMPC incurred losses in faith; and (5) that it uses fair and reasonable criteria in
1997 and 1998. In the face of these setbacks and in a ascertaining who would be retrenched or retained.
bid to cushion the impact of its business reversals and
continue operations, MMPC implemented various cost-
cutting measures. In February 1998, MMPC finally
instituted the first stage of its retrenchment program 3. Redundancy
affecting around 531 hourly manufacturing employees,
Page 65 of 124
perform the very same tasks of Rowena. Her position

was therefore not redundant.
DUSIT HOTEL NIKKO V. NUWHRAIN (2005)
Rowena was employed by Dusit Hotel Nikko as Senior

Front Office Cashier. In 1995, the hotel offered a ANDRADA v. NLRC
special retirement program to all its employees to Legend Hotel sent DOLE a notice of its intention to
facilitate the streamlining of the organization by retrench and terminate its employees on a first-in-first-
eliminating redundant positions. out basis, it then proceeded to do so. However, on the
same day, Legend put out a notice for employment for
the same positions that the petitioners had held.
Rowena was terminated from work due to redundancy
and was advised to avail of the retirement program. ISSUE: WoN petitioners were validly retrenched.
She refused for at that time she had decided to file a HELD: No, they were not. A company's exercise of its
complaint for illegal dismissal. management prerogatives is not absolute. It cannot
exercise its prerogative in a cruel, repressive, or
despotic manner. Employment is not merely a lifestyle
When news spread that Rowena would file a case
choice to stave off boredom. Employment to the
against the hotel, management told her that she was
common man is his very life and blood, which must be
still considered an employee but that they could offer
protected against concocted causes to legitimize an
her only lower positions that did not require guest
otherwise irregular termination of employment.
exposure. When Rowena refused, no specific position
retrenchment and redundancy are authorized causes
or task was given to her.
for separation from service. However, to protect labor,
dismissals due to retrenchment or redundancy are
WON Rowena position was redundant? NO. subject to strict requirements under Article 283
REDUNDANCY RETRENCHMENT
Redundancy exists when the service capability of the Where the services of an Used interchangeably
workforce is in excess of what is reasonably needed to employee are in excess with the term "lay-off."
meet the demands of the business enterprise. A of what is reasonably
reasonably redundant position is one rendered demanded by the actual
superfluous by any number of factors, such as requirements of the
overhiring of workers, decreased volume of business, enterprise.
dropping of a particular product line or phasing out of a It is the termination of
service activity. employment initiated by
A position is redundant
where it is superfluous, the employer through no
and superfluity of a fault of the employee's
Requisites of a valid redundancy program include:
position or positions may and without prejudice to
1. Good faith of the employer in abolishing the the latter, resorted to by
be the outcome of a
redundant position management during
number of factors, such
2. Fair and reasonable criteria in ascertaining which as over hiring of periods of business
positions must be declared redundant and abolished workers, decreased recession, industrial
volume of business, or depression, or seasonal
dropping of a particular fluctuations, or during lulls
As found by the NLRC and CA, the position of Rowena product line or service occasioned by lack of
was not abolished nor declared redundant. In fact, the activity previously orders, shortage of
hotel had hired an entirely new set of employees to manufactured or materials, conversion of
undertaken by the the plant for a new
Page 66 of 124
enterprise production program or the The respondent was dismissed from work for
introduction of new redundancy after the reorganization of the company.
methods or more efficient She was offered another position but she declined and
filed an action for illegal dismissal.
machinery, or of
automation.
It is an act of the The Court held that it has inclined towards the worker
Exists when the number
and upheld his cause in most of his conflicts with his
of employees is in employer of dismissing
employer. This favored treatment is consonant with
excess of what is employees because of the social justice policy of the Constitution. But while
reasonably necessary to losses in the operation of tilting the scales of justice in favor of workers, the
operate the business. a business, lack of work, fundamental law also guarantees the right of the
and considerable employer to reasonable returns for his investment. In
reduction on the volume this light, the Court must acknowledge the prerogative
of his business, a right of the employer to adopt such measures as will
promote greater efficiency, reduce overhead costs and
consistently recognized
enhance prospects of economic gains, albeit always
and affirmed by this Court within the framework of existing laws.
Accordingly, the Court sustains the reorganization
Declaration of redundant positions is a management and redundancy program undertaken by SMART,
which was done with honest effort to make SMARTs
prerogative and determination that the employee's
sales and marketing departments more efficient and
services are no longer necessary or sustainable and competitive.
therefore properly terminable is an exercise of
However, SMART failed to comply with the
business judgment by the employer. The wisdom or
mandated one month notice prior to termination as
soundness of this judgment is not subject to the required in ART 283 of the Labor Code
discretionary review of the LA and NLRC; HOWEVER,
it is not enough for a company to merely declare that
positions have become redundant. It must produce 4. Closure of Business
adequate proof of such redundancy to justify the
dismissal of the affected employees. The employer
bears the burden of proving the cause or causes for EASTRIDGE GOLF vs. EASTRIDGE LABOR UNION
termination. Its failure to do so would necessarily lead
to a judgment of illegal dismissal. Petitioner terminated respondents due to company
reorganization/downsizing and transfer of operations
to a concessionaire.
Substantial evidence is the question of evidence
required to establish a fact in cases before
administrative and quasi-judicial bodies. The cessation of petitioner's F&B operations and
transfer to the concessionaire being a mere
Substantial evidence: that amount of "relevant
subterfuge, the dismissal of respondents by reason
evidence which a reasonable mind might accept thereof was illegal.
as adequate to support a conclusion." Petitioner did not cease its F&B operations but merely
The basis for retrenchment was not established by simulated its transfer to the concessionaire.
substantial evidence, we also rule that Legend failed
to establish by the same quantum of proof the fact of
redundancy; hence, petitioners' termination from
employment was illegal. CARAG V. NLRC
Mariveles Apparel Corporation was adjudged guilty of
illegal closure of business when it ceased operations
SMART COMMUNICATIONS, INC., v. ASTORGA
and without observing the requirement provided by
283, that is, to give notice to its employees and DOLE.
Page 67 of 124
The LA held that MACs argument that it did not close Consequently because employees unilaterally severed
down its business but merely ceased operations relations with JPL by applying elsewhere they could
temporarily does not hold anymore. LA ruled that since not claim illegal dismissal.
the cessation of operations has exceeded the 6-month 3. Disease
period fixed in Art. 283, the temporary shutdown had
ripened into a closure or cessation of operations for
causes not due to serious business losses or Art. 284. Disease as ground for termination. An
financial reverses. Consequently, separation pay employer may terminate the services of an employee
must be paid. The corporate officers cannot be held who has been found to be suffering from any disease
solidarily liable for the companys debts for separation and whose continued employment is prohibited by law
pay however as the Corporation Code applies, Which or is prejudicial to his health as well as to the health of
his co-employees: Provided, That he is paid separation
provides that an officer may be held personally liable
pay equivalent to at least one (1) month salary or to
only when he willfully and knowingly votes for or one-half (1/2) month salary for every year of service,
assents to patently unlawful acts of the whichever is greater, a fraction of at least six (6)
corporation and/or if he is guilty of gross months being considered as one (1) whole year.
negligence or bad faith in directing the affairs of
the corporation. None of these acts was committed
by officer Carag. SY v. CA
5. Temporary Closure/Bona Fide Suspension of Private respondent Sahot started working as a truck
Operations helper for petitioners' family-owned trucking business
and later on became a truck driver of the same family
business.
Art. 286. When employment not deemed
terminated. The bona-fide suspension of the Subsequently, petitioners dismissed Sahot from work
operation of a business or undertaking for a period not due to his absences as he was suffering from various
exceeding six (6) months, or the fulfillment by the ailments.
employee of a military or civic duty shall not terminate
employment. In all such cases, the employer shall WoN Sahot was illegally dismissed? YES
reinstate the employee to his former position without
The Supreme Court ruled that Sahot actually
loss of seniority rights if he indicates his desire to
resume his work not later than one (1) month from the engaged in work as an employee. During the entire
resumption of operations of his employer or from his course of his employment, he did not have the
relief from the military or civic duty. freedom to determine where he would go, what he
would do, and how he would do it. He merely followed
instructions of petitioners and was content to do so,
JPL MARKETING PROMOTIONS V. CA as long as he was paid his wages.
Employees were assigned to work with CMC by JPL a The Court further ruled that in termination cases, the
recruitment and placement agency. CMC closed burden is upon the employer to show by substantial
operations and employees were instructed to wait for a evidence that the termination was for lawful cause,
reassignment by JPL. Pending the reassignment they and validly made.
found work elsewhere and filed suit for illegal dismissal Article 284 of the Labor Code authorizes an employer
against JPL for lack of notification. to terminate an employee on the ground of disease
There was no illegal dismissal. JPL exercised its right and the requirement for a medical certificate under
to a bona fide suspension of operations due to a the said provision cannot be dispensed with;
closure of CMC. They had 6 months to find employees otherwise, it would sanction the unilateral and
other employment, and only upon the lapse of such arbitrary determination by the employer of the gravity
period could they be considered illegally dismissed. or extent of the employee's illness and thus defeat
the public policy in the protection of labor.
Page 68 of 124
complaint with the regional branch of the National

Labor Relations Commission. The burden of proving
CRAYONS PROCESSING v PULA
that the termination was for a valid or authorized cause
shall rest on the employer. The Secretary of the
Pula was working for Crayons when he suffered a Department of Labor and Employment may suspend
heart attack. After his operation, he was given a the effects of the termination pending resolution of the
certification by his doctor that he was fit to work. When dispute in the event of a prima facie finding by the
he returned to work he suffered a relapse, he appropriate official of the Department of Labor and
complained of dizziness. The company asked him to Employment before whom such dispute is pending that
resign with an offer of financial assistance. Pula the termination may cause a serious labor dispute or is
refused and filed a case for illegal dismissal. in implementation of a mass lay-off.
For a dismissal on the ground of disease to be Book VI, Rule I, Sec. 1-3, Omnibus Rules
considered valid, two requisites must concur: (a) the
employee must be suffering from a disease which
cannot be cured within six months and his continued 1. In General: Essential Elements of Due Process
employment is prohibited by law or prejudicial to his
health or to the health of his co-employees; and (b) a
certification to that effect must be issued by a a. Compliance with the Twin requirements of
competent public health authority. The burden falls Notice and Hearing
upon the employer to establish these requisites, and in
the absence of such certification, the dismissal must
necessarily be declared illegal. It is only where there
is a prior certification from a competent public authority
that the disease afflicting the employee sought to be PHILIPPINE PASAY CHUNG HUA ACADEMY v
dismissed is of such nature or at such stage that it EDPAN
cannot be cured within six (6) months even with proper
medical treatment that the latter could be validly
terminated from his job. There was no such Edpan was a high school teacher at PPCHA. Student
certification in this case. The dismissal was therefore AAA and her parents complained that Edpan molested
illegal. her. He was dismissed because of the incident
The twin requirements of notice and hearing are

D. Procedural Requirements essential elements of due process. The Labor Code
requires the employer to furnish the employee with
Art. 277. Miscellaneous provisions. two written notices: (1) a written notice served on the
employee specifying the ground or grounds for
b.Subject to the constitutional right of workers to termination, and giving to said employee reasonable
security of tenure and their right to be protected opportunity within which to explain his side; and (2) a
against dismissal except for a just and authorized written notice of termination served on the employee
cause and without prejudice to the requirement of indicating that upon due consideration of all the
notice under Article 283 of this Code, the employer circumstances, grounds have been established to
shall furnish the worker whose employment is sought justify his termination.
to be terminated a written notice containing a
afford the latter ample opportunity to be heard and to PPCHA observed procedural due process before
defend himself with the assistance of his Edpan was dismissed. It informed him of the complaint
representative if he so desires in accordance with and gave him opportunities to present his side. It was
company rules and regulations promulgated pursuant only after hearing his side, that PPCHA furnished him
to guidelines set by the Department of Labor and a notice dismissing him from its service. Even if no
Employment. Any decision taken by the employer shall hearing or conference was conducted, the requirement
be without prejudice to the right of the worker to of due process had been met since he was accorded a
contest the validity or legality of his dismissal by filing a chance to explain his side of the controversy. The
essence of due process lies simply in an opportunity to
Page 69 of 124
be heard, and not that an actual hearing should always conference" requirement in the implementing rules
and indispensably be held. and regulations.
TELECOM v. GARRIEL (2009) Furthermore, Petitioners complied with the twin-notice

requirement. The first notice served on respondent
Respondent Garriel was a Customer Sales Assistant
was the written notice specifying the charges against
(CSA) of petitioner Telecommunications Distributors
him. The subsequent notice (notice of adjudication
Specialist, Inc. (TDSI). He committed serious acts of
specifying therein the causes for respondents
dishonesty, i.e., forging subscribers signatures,
termination and the decision to dismiss him) served as
attempting to cover up his failure to secure their
the written notice of termination.
signatures on the coverage waivers, selling a
personally owned mobile phone to a company
customer (a defective one at that) and attempting to b. Liability for non-compliance with procedural
connive with other TDSI employees to cover up his requirements
illicit schemes.
These incidents came to the attention of the HR
manager who lost no time to look into the matter. AGABON v. NLRC
Respondent was issued a notice to explain which
served as a formal notice of violation of company rules Employees abandoned their job to work for another
and procedures. Respondent was formally company. They were dismissed in their former job and
investigated. In a notice dated February 7, 2001 they still filed for illegal termination. Their employer,
respondent was dismissed on grounds of serious however, did not send notices to the last known
addresses saying they would have been useless
misconduct and loss of trust and confidence.
because they did not reside there anymore.
WON due was observed in dismissing Garriel
YES, due process was observed. Respondent was Having established the petitioners employment were
given ample opportunity to explain and rebut the justifiably terminated, the issue is WON respondent
evidence against him. A full adversarial hearing was company complied with procedural requirements for
not required. The essence of due process is simply the terminating the employees services. NO.
opportunity to be heard. As applied in administrative
proceedings, it is merely an opportunity to explain Standards of due process: requirements of notice. In
ones side or an opportunity to seek a reconsideration all cases of termination of employment, the following
of the action or ruling complained of. standards of due process shall be substantially
observed:
The following are the guiding principles in connection
with the hearing requirement in dismissal cases: I. For termination of employment based on just causes
as defined in Article 282 of the Code:
1. "Ample opportunity to be heard" means any
meaningful opportunity (verbal or written) given to (a) A written notice served on the employee specifying
the employee to answer the charges against him the ground or grounds for termination, and giving to
and submit evidence in support of his defense, said employee reasonable opportunity within which to
whether in a hearing, conference or some other explain his side;
fair, just and reasonable way. (b) A hearing or conference during which the employee
2. A formal hearing or conference becomes concerned, with the assistance of counsel if the
mandatory only when requested by the employee employee so desires, is given opportunity to respond
in writing or substantial evidentiary disputes exist to the charge, present his evidence or rebut the
or a company rule or practice requires it, or when evidence presented against him; and
similar circumstances justify it. (c) A written notice of termination served on the
3. The "ample opportunity to be heard" standard in employee indicating that upon due consideration of all
the Labor Code prevails over the "hearing or the circumstances, grounds have been established to
justify his termination.
Page 70 of 124
personnel or contracted to outside agencies . . .

Awhile there] should be mutual consultation,
In case of termination, the foregoing notices shall be
eventually deference is to be paid to what
served on the employee's last known address.
management decides." Consequently, absent proof
Where the dismissal is for a just cause, as in the that management acted in a malicious or arbitrary
instant case, the lack of statutory due process should manner, the Court will not interfere with the exercise of
not nullify the dismissal, or render it illegal, or judgment by an employer.
ineffectual. However, the employer should indemnify
the employee for the violation of his statutory rights.
The Court also pointed out that petitioner merely had a
bare assertion that in abolishing the security section,
private respondent's real purpose was to avoid
SERRANO V. NLRC payment to the security checkers of the wage
increases provided in the collective bargaining
agreement. To the Court, such assertion was not
Petitioner was hired by respondent Isetann sufficient to conclude that the termination of
Department Store as a security checker to apprehend petitioner's employment was not a bona fide decision
shoplifters and prevent pilferage of merchandise. of management to obtain reasonable return from its
Initially hired on October 4, 1984 on contractual basis, investment, which is a right guaranteed to employers
petitioner eventually became a regular employee. under the Constitution.
Sometime in 1991, as a cost-cutting measure, private
respondent decided to phase out its entire security
section and engage the services of an independent With regard to the second issue, the Court found that
security agency as a result of which, petitioner was the procedure was not complied with. The SC cited
given his notice of termination on the very same day Article 283 which requires that notice of dismissal must
he was terminated. be made a month, or 30 days prior the date of
dismissal. In this case, petitioner was served his notice
of dismissal on the day he was dismissed.
Issue:
1. WON petitioner was dismissed for a just cause With regard to the third issue, The Majority conceded
2. WON respondent complied with the procedure that the prevailing rule that upholds the dismissal but
according to the law ordering damages is not effective, and hence saw the
need to reexamine the rule. However, the Majority did
3. WON such noncompliance results in nullity of not agree with Justice Puno that the dismissal should
the dismissal and hence backwages and be considered null and void. To the Majority, such rule
reinstatement should be ordered. (which was the old rule), is in an injustice to the
Court: employer. The Majority further pointed out that it is
oppression to compel the employer to keep in
1. Petitioner was dismissed for a just cause
employment one who is guilty or to Circe the employer
2. Respondent did not comply with the to remain in operatic- ~ when it is not economically in
procedure. his interest to do so. The Majority was also of the view
3. Such noncompliance results in rendering the that there are three reasons why violation by the
dismissal ineffectual only warranting the award employer of the notice requirement cannot be
of separation pay and damages. considered a denial of due process resulting in the
nullity of the employees dismissal or layoff:
The Court found that the dismissal was for a just

cause. According to the Court: 1. Due Process Clause of the Constitution is a
limitation on governmental powers. It does not
apply to the exercise of private power
The "[management of a company] cannot be denied 2. Notice and hearing are required under the Due
the faculty of promoting efficiency and attaining Process Clause before the power of organized
economy by a study of what units are essential for its society are brought to bear upon the individual.
operation. To it belongs the ultimate determination of Here the employee is not faced with an aspect of
whether services should be performed by its the adversary system. The purpose for requiring a
Page 71 of 124
30-day written notice before an employee is laid off employer, shifting this burden on employee. Now, an
is not to afford him an opportunity to be heard on illegally dismissed employee often goes to the DOLE
any charge against him, for there is none. The without an exact knowledge of cause of dismissal.
purpose rather is to give him time to prepare for the Without proper notice and hearing, probability is that
eventual loss of his job and the DOLE an an employee will fail to prove the illegality of dismissal
opportunity to determine whether economic causes and all he can prove is he was dismissed without
do exist justifying the termination of his notice and penalty for omission is mere fine.
employment.
In the case at bar, the bare assertion of petitioner is

3. The employer cannot really be expected to be understandable because notice given to him spoke of
entirely an impartial judge of his own cause a general ground: retrenchment. No details were
given. Indeed, the employee was dismissed on the day
he received the notice. He was given no time, no
The SOLUTION of the Majority is that with respect to opportunity to ascertain and verify the real cause of his
Art. 283 of the Labor Code, the employer's failure to dismissal. Thus, he filed with DOLE a complaint for
comply with the notice requirement does not constitute illegal dismissal with hazy knowledge of its real cause.
a denial of due process but a mere failure to observe a
procedure for the termination of employment which
makes the termination of employment merely Wenphil held that due process is satisfied if employee
ineffectual. This means that the employee is entitled to is given opportunity to be heard by the Labor Arbiter.
separation pay, etc., and full backwages until such The failure of the employer to give a pre-dismissal
time as he could be considered as validly dismissed. notice is only to be penalized by payment of an
However, he cannot be ordered reinstated, and only if indemnity: The dilution of the rule has been abused by
the termination of employment is not for any of the unscrupulous employers who then followed the
causes provided by law is it illegal and, therefore, the Dismiss now, pay later strategy.
employee should be reinstated and paid backwages.
The Pre-Wenphil rule requires that before the right of

IN the case at bar, the Court ordered private the employer to dismiss can be exercised, he must
respondent Isetann Department Store, inc. to pay give prior notice to the employee of its cause. If he
petitioner separation pay equivalent to one (1) month falls to give notice, he forfeits his right to dismiss by
pay for every year of service, his unpaid salary, and failing to follow the procedure for the exercise of his
his proportionate 13th month pay and, in addition, full right. An employee under Article 283 has a stronger
backwages from the time his employment was claim to the right to a pre-dismissal notice and hearing.
terminated on October 11, 1991 up to the time the
decision herein becomes final.
Puno, J dissent: 2. Right to Counsel
PUNO, J., dissenting: SALAW V. NLRC (1991)
The rule hear the other side is the essence of Salaw was employed by the Associated Bank as a
procedural due process. That "party is not to suffer in
credit investigator-appraiser. The Criminal
person or in purse without an opportunity of being
heard" is oldest principle in administrative law. I submit Investigation Service (CIS) extracted from Salaw,
a return to pre-Wenphil rule where reasonless violation without the assistance of counsel, a sworn statement
of pre-dismissal notice requirement makes dismissal wherein Salaw admitted that he sold properties which
illegal resulting in reinstatement. had been foreclosed by the Bank. Salaw was then
ordered to appear before the Banks Investigation
Committee without counsel or representative. After
One undesirable effect of Wenphil is that it Compels
employees to seek relief against illegal dismissals with being terminated from work, he filed a complaint for
DOLE whereas a remedy can be sought before the illegal dismissal.
Page 72 of 124
employment through a letter for his alleged fraudulent

action.
WON Salaw was illegally dismissed? YES.
ISSUE: WoN KKTI complied with the requirements of
procedural due process before dismissing the services
Salaw was dismissed without the benefit of due of the complainant/private respondent.
process of law. The records clearly show that Salaw
HELD: No, it did not.
was denied this constitutional right when a hearing
was set without counsel or representative. Due process under the LC involves two aspects: first,
substantive: the valid and authorized causes of
termination of employment under the Labor Code; and
According to Section 5 of Rule XIV, Book V of the second, procedural: the manner of dismissal.
Omnibus Rules, the employer shall afford the worker
(1) The first written notice to be served on the
ample opportunity to be heard and to defend himself
employees should contain the specific causes or
with the assistance of his representative, if he so
grounds for termination against them, and a
desires. In this case, Salaw was denied the assistance
directive that the employees are given the
of counsel during the investigation conducted by the
opportunity to submit their written explanation within
PDIC. No justification was offered.
a reasonable period. Reasonable opportunity
under the Omnibus Rules means every kind of
It is worth noting that the company merely relied upon assistance that management must accord to the
Salaws sworn statement which is inadmissible as employees to enable them to prepare adequately
evidence having been obtained from Salaw without the for their defense. This should be construed as a
assistance of counsel. period of at least five (5) calendar days from receipt
of the notice to give the employees an opportunity
to study the accusation against them, consult a
union official or lawyer, gather data and evidence,
3. Notice and decide on the defenses they will raise against
the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation
KING OF KINGS TRANSPORT v. MAMAC and defenses, the notice should contain a detailed
narration of the facts and circumstances that will
FACTS: KKTI hired Mamac as bus conductor of Don
serve as basis for the charge against the
Mariano Transit Corporation (DMTC) wherein he was
employees. A general description of the charge will
required to accomplish a Conductors Trip Report
not suffice. Lastly, the notice should specifically
and submit it to the company after each trip. As a
mention which company rules, if any, are violated
background, this report indicates the ticket opening
and/or which among the grounds under Art. 282 is
and closing for the particular day of duty. KKTI noted
being charged against the employees.
an irregularity. It discovered that respondent declared
several sold tickets as returned tickets causing KKTI to (2) After serving the first notice, the employers
lose an income of eight hundred and ninety pesos. should schedule and conduct a hearing or
While no irregularity report was prepared on the conference wherein the employees will be given
October 28, 2001 incident, KKTI nevertheless asked the opportunity to: (1) explain and clarify their
respondent to explain the discrepancy. Mamac said defenses to the charge against them; (2) present
that the erroneous declaration in his trip report was evidence in support of their defenses; and (3) rebut
unintentional; saying that during that days trip, the the evidence presented against them by the
windshield of the bus assigned to them was smashed; management. During the hearing or conference,
and they had to cut short the trip in order to the employees are given the chance to defend
immediately report the matter to the police. As a result themselves personally, with the assistance of a
of the incident, he got confused in making the trip representative or counsel of their choice. Moreover,
report. Nearly a month after, KKTI terminated his this conference or hearing could be used by the
Page 73 of 124
parties as an opportunity to come to an amicable

settlement. The first notice must state that the employer seeks
(3) After determining that termination of employment is dismissal for the act or omission charged against the
employee, otherwise, the notice does not comply with
justified, the employers shall serve the employees a
the rules.
written notice of termination indicating that: (1) all
circumstances involving the charge against the
employees have been considered; and (2) grounds As held in Maquiling v. Philippine Tuberculosis Society,
have been established to justify the severance of Inc., the purpose of the first notice is to afford the
their employment. employee an opportunity to avail all defenses and
exhaust all remedies to refute the allegations hurled
Mamac was not issued a written notice charging him of against him for what is at stake is his very life and limb
committing an infraction. The law is clear on the his employment.
matter. A verbal appraisal of the charges against an
employee does not comply with the first notice
4. Hearing
requirement. Even assuming that petitioner KKTI was
able to furnish respondent an Irregularity Report
notifying him of his offense, such would not comply a. Hearing
with the requirements of the law. We observe from the
irregularity reports against respondent for his other PEREZ vs. PT&T
offenses that such contained merely a general A memorandum was issued by respondent dismissing
description of the charges against him. The reports petitioners from service for having falsified company
did not even state a company rule or policy that the documents.
employee had allegedly violated. Likewise, there is no
The existence of an actual, formal "trial-type" hearing,
mention of any of the grounds for termination of although preferred, is not absolutely necessary to
employment under Art. 282 LC. Lastly, no hearing was satisfy the employees right to be heard. A hearing
conducted. Regardless of respondents written means that a party should be given a chance to
explanation, a hearing was still necessary in order for adduce his evidence to support his side of the case
him to clarify and present evidence in support of his and that the evidence should be taken into account in
defense. the adjudication of the controversy. "To be heard" does
not mean verbal argumentation alone inasmuch as
MAGRO PLACEMENT AND GENERAL SERVICES v. one may be heard just as effectively through written
HERNANDEZ explanations, submissions or pleadings.
The employee who only knows how to repair The following are the guiding principles in connection
Japanese cars executes three statements admitting he with the hearing requirement in dismissal cases:
was ill-equipped for the job. He was dismissed due to
(a) "ample opportunity to be heard" means any
incompetency.
meaningful opportunity (verbal or written) given to
the employee to answer the charges against him
The dismissal of the employee does not comply with and submit evidence in support of his defense,
the procedural requirement. According to Art 277 of the whether in a hearing, conference or some other
Labor Code and Section 2, Rule XXIII, Book V of the fair, just and reasonable way.
Omnibus Rules, the employer has the burden of
proving that the dismissed worker has been served
(b) a formal hearing or conference becomes
two notices:
mandatory only when requested by the employee
1. To inform the employee of the particular acts in writing or substantial evidentiary disputes exist
or omissions for which the employer seeks his or a company rule or practice requires it, or when
dismissal similar circumstances justify it.
2. To inform the employee of his employers
decision to terminate him.
Page 74 of 124
(c) the "ample opportunity to be heard" standard in dismissal. The employers claim the labor arbiter failed
the Labor Code prevails over the "hearing or to conduct sufficient proceedings because they
conference" requirement in the implementing rules decided purely on the basis of the pleadings.
and regulations.
The SC upheld the Labor Arbiters discretion in
conducting labor disputes. The LA may decide if a
formal hearing is necessary, or may make her decision
on the basis of the position papers alone. In the
MUAJE-TUAZON V. WENPHIL CORP. absence of palpable error the NLRC must respect the
Two branch managers of Wendys were found to have discretion of the Labor Arbiter. This is supported by the
cheated in the fast-food chains promotional contest, Rulve V of the Rules of Procedure of the NLRC.
Biggie Size It! Crew Challenge. Petitioners were
summoned to the main office regarding the reported
5. Decision/Award
anomaly. Immediately thereafter, petitioners were
notified, in writing, of hearings scheduled and then
of their immediate suspension. Consequently, Const Art VIII, Sec. 14
Petitioners were dismissed.
No decision shall be rendered by any court without
The law requires that the employee be given two expressing therein clearly and distinctly the facts and
written notices before terminating his employment, the law on which it is based.
namely: (1) a notice which apprises the employee of No petition for review or motion for reconsideration of a
the particular acts or omissions for which his dismissal decision of the court shall be refused due course or
is sought; and (2) the subsequent notice which informs denied without stating the legal basis therefor.
the employee of the employer's decision to dismiss
him. Petitioners were given written notices informing
them that they were charged with serious misconduct
and dishonesty in relation to the promo contest, and
ABD Overseas v NLRC
notifying them of the scheduled hearings. Also, there
were other investigations or hearings set after those
scheduled, where they had the opportunity to explain Macaraya was deployed to Saudi Arabia. She was
their side after they were apprised of their alleged made to work as a domestic helper over her objections
infractions. There were also written notices given and in violation of the contract she signed in Manila.
notifying petitioners of the companys decision to After working for three months and thirteen days,
terminate them. Macaraya was dismissed by her employer, paid merely
700 Saudi riyals, and repatriated to the Philippines.
As to petitioners contention that they were not given
the opportunity to confront the witnesses against them,
it must be reminded that confrontation of witnesses is WoN transferee recruitment agent (ABD) of a foreign
required only in adversarial criminal prosecutions, and employer/recruitment office (Al Babtain) be impleaded
under POEA Rules for the illegal dismissal of an
not in company investigations for the administrative
overseas worker who filed the case prior to the
liability of the employee. transferee agent's accreditation?
b. Use of Position Paper Yes, however this case is an exception
SEASTAR MARINE SERVICES, INC. V. BUL-AN, JR. Section 6, Rule I, Book III of the POEA Rules which
states, The accreditation of a principal or a project
Employee was a seaman and mauled several times by may be transferred to another agency provided that
his co-employee. He was eventually terminated for his transfer shall not involve any diminution of wages and
uncooperative attitude. The labor arbiter found illegal benefits of workers. xxx
Page 75 of 124
The services of Panfilo Macasero (petitioner) were

engaged by Southern Industrial Gases, Philippines
It is clear from the provision of the POEA Rules that
(respondent company) as Carbon Dioxide Bulk Tank
the transferee agency shall assume full responsibility
Escort since September 1995. In September 1998, he
to all contractual obligations of the principals to its
was advised that his services were no longer needed
workers originally recruited and processed by its
and was in fact prevented from entering the company
former agency.
premises. He filed a case for illegal dismissal.
Section 13, Rule VII of the New Rules of Procedure of

In illegal dismissal cases, the onus of proving that the
the NLRC provides, Form of Decision
employee was not dismissed or, if dismissed, that the
Resolution/Order. - The Decision/Resolution shall state
dismissal was not illegal, rests on the employer, failure
clearly and distinctly the findings of facts, issues and
to discharge which would mean that the dismissal is
conclusions of law on which it is based and the relief
not justified and, therefore, illegal.
granted, if any. If the decision or resolution involves
monetary awards, the same shall contain the specific Respondents claim that there was a business slump,
amount awarded as of the date the decision is hence, petitioner could not be given any escorting
rendered." assignment has remained just that. The records are
bereft of any documentary evidence showing that it
was indeed suffering losses or a decline in orders
This provision of the Rules is obviously in consonance which justified its admitted failure to give assignments
with Section 14, Article VIII of the Constitution to petitioner. The court held that petitioner was illegally
providing that "(n)o decision shall be rendered by any dismissed.
court without expressing therein clearly and distinctly
the facts and the law on which it is based." The court also commented on lower courts award of
separation pay in lieu of reinstatement in light of
respondent companys firm stance that petitioner was
A cursory reading of this provision lends the
not its employee. It said that the award of separation
impression that an accreditation transferee assumes
pay is inconsistent with a finding that there was no
the contractual responsibility of the transferor under all
illegal dismissal.
circumstances, without qualification. However, the
court held that a strict application of said proviso in this
case may result in a grave injustice to petitioner. REYES v NLRC & COCA-COLA
Section 6, Rule II, Book III of the POEA Rules may not Reyes was terminated after one year as a Route
be used as a shield against liability by a recruitment Salesman. CCBP claims that the employment was for
agency that has been substituted by a foreign principal a fixed period of three months, for a particular project
as its local recruitment agency after it has clearly which turned out to be not viable, which lead to his
incurred liability in favor of an overseas worker. termination.
In so ruling, the Court is not in any way invalidating There was insufficient evidence to sustain the
Section 6, Rule II, Book III of the POEA Rules. The averment of CCBP that petitioners employment was
presumption of its validity remains. Its application in for a fixed period. CCBP and Taguibao failed to
this case should, however, be an exception to the rule. present a copy of petitioners purported Contract of
Employment. The only evidence adduced by
respondents CCBP and Taguibao to buttress their
contention of petitioners fixed-period employment was
the Affidavit of respondent Taguibao herself, which
6. Burden of Proof could not be afforded any evidentiary weight in the
absence of independent corroborating evidence.
MACASERO v SOUTHERN INDUSTRIAL GASES

PHIL.
SKIPPERS UNITED PACIFIC v. NLRC (2006)
Page 76 of 124
Respondent Rosaroso was signed up as a 3rd subcontract a job. There was no proof given on what
Engineer with a foreign firm, through its recruitment was the supposed-to-be original price. He was
and manning agency, herein petitioner Skippers United dismissed.
Pacific, Inc. The term of the contract was for one year.
Barely a month after boarding the vessel, respondent WON the employee was proven guilty based on
was ordered to disembark and repatriated to the substantial evidence. No.
Philippines
Labor Arbiter found that respondent was illegally Management did not show any contract to prove that
dismissed. The NLRC and the CA affirmed the the extorted persons services were estimated at a
decision of the LA. All three tribunals the CA, the cetain amount, as proof that private respondent asked
NLRC, and the Labor Arbiter refused to give credence him to overprice it.
to the Chief Engineers Report relied upon by
petitioner. There is also no clear showing that private respondent
WON the Report can be given any probative value was in a position to influence company decisions in
to the Chief Engineers Report justify the dismissal giving out contracts of services.
or respondent
NO, the lower courts are one in ruling that the Report Finally, private respondent was dismissed for willful
cannot be given any probative value as it is violation of trust. However, there is no showing that he
occupied a position of trust and confidence. The
uncorroborated by other evidence and that it is merely
position of private respondent as Housekeeping
hearsay, having come from a source, the Chief Coordinator at the General Services Department of
Engineer, who did not have any personal knowledge of Philtread can hardly be considered as one of trust and
the events reported therein. Similarly in this case, confidence.
petitioner should have presented other evidence to
corroborate its claim that respondents acts or
omissions aboard the vessel ETCUBAN V. SULPICIO LINES
The rule in labor cases is that the employer has the

burden of proving that the dismissal was for a just Respondent Sulpicio Lines, Inc. is a domestic
cause; failure to show this would necessarily mean corporation engaged in the business domestic
shipping. The petitioner was employed by the
that the dismissal was unjustified and, therefore,
respondent on January 30, 1978 until his dismissal on
illegal. June 10, 1994 for loss of trust and confidence. At the
The Report cannot be considered to constitute time of his dismissal, the petitioner was the Chief
substantial evidence proving that respondents Purser of the M/V Surigao Princess. As the Chief
Purser, the petitioner handled the funds of the vessel
dismissal was for cause. Although substantial
and was the custodian of all the passage tickets and
evidence is not a function of quantity but rather of bills of lading. It was his responsibility, among other
quality, the peculiar environmental circumstances of things, to issue passage tickets and to receive
the instant case demand that something more should payments from the customers of the respondent, as
have been proffered. well as to issue the corresponding official receipts
therefor. He was also tasked to disburse the salaries of
the crewmen of the vessel.
7. Degree of Proof/Substantial Evidence
The newly designated jefe de viaje of the M/V Surigao
Princess, in a surprise examination, discovered that
PHILTREAD TIRE & RUBBER CORPORATION vs. several yellow passengers duplicate original of yet to
VICENTE be sold or unissued passage tickets already contained
the amount of P88.00 the fare for adult passengers
for the Cagayan de Oro to Jagna, Bohol route. He
An employee was charged with extortion for asking,
noticed that three other original copies which made up
but not receiving, additional money for a person to
the full set did not bear the same impression, although
Page 77 of 124
they were supposed to have been prepared at the

same time. Acting on what appeared to be a strong DE GUZMAN V. NLRC (2007)
evidence of short-changing the company, the jefe de
viaje dug deeper on what he uncovered. As expected,
he found inordinate amount of ticket issuances for
children at half the fare of P44.00 in Voyage 434 of the De Guzman was employed as a bus conductor by
vessel. He was put under preventive suspension, and Philippine Rabbit Bus Line Co. De Guzman filed
while he was under said suspension, he was replaced applications for LOA because he was experiencing
by another person as Chief Purser. As a result of chronic pain from gunshot wounds he sustained while
which he filed a case for illegal dismissal. trying to defend the earnings of the company from
brigands. De Guzman failed to return to work several
W/N evidence or proof found herein was sufficient times, but always explained his absences which were
proof to uphold the validity of petitioners mainly due to the chronic pain he experienced. When
dismissal he was given a final warning, he tried several times to
talk with the company president. When he succeeded
Yes, it was enough. in doing so, he was asked to return to work the next
The degree of proof required in labor cases is not as day. However, no work was assigned to him. He filed a
stringent as in other types of cases. It must be noted, case of constructive dismissal against the company.
however, that recent decisions of this Court have
distinguished the treatment of managerial employees
from that of rank-and-file personnel, insofar as the WON De Guzmans dismissal was valid? NO.
application of the doctrine of loss of trust and
confidence is concerned. Thus, with respect to rank-
and-file personnel, loss of trust and confidence as Philippine Rabbit contends that De Guzman
ground for valid dismissal requires proof of
abandoned his work. The burden of proof rests upon
involvement in the alleged events in question, and that
mere uncorroborated assertions and accusations by the employer to show an intent on the part of the
the employer will not be sufficient. But as regards a employee to discontinue work. In the case at bar,
managerial employee, the mere existence of a basis Philippine Rabbit failed to discharge this burden for it
for believing that such employee has breached the is clear that De Guzman filed applications for LOA and
trust of his employer would suffice for his dismissal. explained his absences several times, clearly showing
Hence, in the case of managerial employees, proof that he was still interested in his job.
beyond reasonable doubt is not required, it being
sufficient that there is some basis for such loss of
confidence, such as when the employer has
reasonable ground to believe that the employee WON Philippine Rabbit has proven that it has paid the
concerned is responsible for the purported monetary benefits claimed by De Guzman? NO.
misconduct, and the nature of his participation therein
renders him unworthy of the trust and confidence
demanded by his position. In the present case, the Once the employee has set out with particularity in his
petitioner is not an ordinary rank-and-file employee. complaint the labor standard benefits he is entitled to,
The petitioners work is of such nature as to require a and which he alleged that the employer failed to pay
substantial amount of trust and confidence on the part him, it becomes the employers burden to prove that it
of the employer. Being the Chief Purser, he occupied a
has paid the money claims.
highly sensitive and critical position and may thus be
dismissed on the ground of loss of trust and
confidence. One of the many duties of the petitioner
included the preparation and filling up passage tickets, It is Philippine Rabbit, the employer, which has the
and indicating the amounts therein before being given burden of proof to show, by substantial evidence, the
to the passengers. More importantly, he handled the payment of petitioners money claims. The company
personnel funds of the MV Surigao Princess. Clearly, failed to discharge this burden by presenting only the
the petitioners position involves a high degree of CBA which does not prove by substantial evidence
responsibility requiring trust and confidence. that De Guzman was indeed paid what was provided
therein. The company did not present any pertinent
Page 78 of 124
employer record to prove payment of the monetary Art. 291. Money claims. All money claims arising
claims. from employee-employer relations accruing during the
effectivity of this Code shall be filed within three (3)
years from the time the cause of action accrued;
otherwise they shall be forever barred.
8. Prescription In illegal dismissal, the 10-year prescriptive period
fixed in Art. 1144 of the Civil Code may not be invoked
by petitioners, for the CC is a law of general
Civil Code, Art. 1146. The following actions must be
application, while the prescriptive period fixed in Art.
instituted within four years:
292 of the LC [now Art. 291] is a SPECIAL LAW
(1) Upon an injury to the rights of the plaintiff; applicable to claims arising from employee-employer
(2) Upon a quasi-delict; relations. Art. 291 of the LC is a special law applicable
to money claims arising from employer-employee
relations; thus, it necessarily prevails over Article 1144
However, when the action arises from or out of any
of the Civil Code, a general law. Petitioner's action for
act, activity, or conduct of any public officer involving
damages due to illegal termination filed again on
the exercise of powers or authority arising from Martial
January 8, 1987 or more than four (4) years after the
Law including the arrest, detention and/or trial of the
effective date of his dismissal on November 1, 1982
plaintiff, the same must be brought within one (1) year.
has already prescribed. Petitioner claims that the
running of the prescriptive period was tolled when he
filed his complaint for illegal dismissal before the
NLRC; however "although the commencement of a
LAUREANO v. CA
civil action stops the running of the statute of
Menandro B. Laureano, applied for employment with prescription or limitations, its dismissal or voluntary
Singapore Airline (SA). SA offered him a contract of abandonment by the plaintiff leaves in exactly the
employment as an expatriate captain for an original same position as though no action had been
period of two (2) years Plaintiff accepted the offer and commenced at all.
commenced working and passed the 6-month
probationary period. SA then offered to extend his
contract for 3-more years. After completing a training VICTORY LINER, INC., v. RACE
course, he was then appointed as a solo duty captain.
A year later, SA hit recession and effected cost-cutting The bus driver of the company figured in an accident.
measures, and terminated the service of some He was hospitalized and when he tried to report back
expatriate captains, Laureano included. SA then paid 3 to work limping on one leg, he was rejected and
months salary in lieu of 3 months notice. Because he offered certain sum for compensation. He filed a
could not uproot his family on such short notice, complaint for illegal dismissal. The company alleged
plaintiff requested a 3-month notice to afford him time that the action has prescribed as it was filed beyond
the four-year prescriptive period.
to exhaust all possible avenues for reconsideration
and retention. SA gave only two (2) months notice and
one (1) month salary. The action has not yet prescribed. The four-year
prescriptive period shall commence to run only upon
WoN the present action is one based on contract the accrual of a cause of action of the worker. It is
which prescribes in 10 years under Art. 1144 or one for settled that in illegal dismissal cases, the cause of
damages arising from an injury to the rights of the action accrues from the time the employment of the
plaintiff which prescribes in 4 years under Art. 1146. worker was unjustly terminated. Thus, the four-year
prescriptive period shall be counted and computed
The SC held that neither Art. 11447 nor Art. 1146 is from the date of the employees dismissal up to the
applicable and that it was Art. 291 LC which applied. date of the filing of complaint for unlawful termination
of employment.
Page 79 of 124
the affidavit of desistance or release is put into issue

then the claim of the employee may still be given due
course. Not all waivers and quitclaims are invalid as
9. Quitclaim
against public policy such as when the agreement was
voluntarily entered into and represents a reasonable
RCBC vs. BITHAO settlement. It is when there is clear proof that the
waiver was wangled form an unsuspecting or gullible
LA held that Bithao was illegally dismissed. Bithao was person, or the terms of settlement are unconscionable
awarded with full backwages, moral and exemplary
in its face, that the law will step in to annul it.
damages and attorneys fees. Before the parties could
receive their copies of the decision, respondent Quitclaims, releases and wavers of benefits granted by
executed a Release, Waiver and Quitclaim. law or contracts in favor of workers should be strictly
scrutinized to protect the weak and the disadvantaged.
Furthermore, quitclaims are ineffective in barring full
The amount received by Bithao by virtue of the recovery of the benefits of the employee.
quitclaim he signed did not include the LA judgment
award. The quitclaim indicates that the amount was
only for his early retirement benefits and additional
benefits. Petitioner took undue advantage of 10. Dismissal of Case, purely on technical ground
respondents predicament and dire financial needs to frowned upon
let him sign the quitclaim in exchange for his
retirement benefits.
QUINTANO V. NLRC
When the quitclaim was executed, petitioners appeal Quintano was hired and dismissed prior to the end of
before the CA was still pending. Since both the LA and his contract. The Labor arbiter found him guilty of
the NLRC have previously ruled in respondents favor, guilty of loss of trust and confidence by his employer.
petitioner was aware of the slim chances it had before On appeal his appeal was denied for submitting a
the appellate court. Under these circumstances, when Xerox copy of the lower courts resolution and not a
the quitclaim was offered and accepted, petitioner certified true copy thereof.
could not deny that the quitclaim was in its own
interest. For respondent, it was not so. The Latin The dismissal of cases purely on the technical aspects
maxim renuntiatio non praesumitur (A waiver of rights is frowned upon because technical rules not intended
is not presumed) applies in this instance. to be used in a rigid technical sense, they are intended
to secure, and not override substantial justice.
11. Criminal Cases
SOLGUS CORP. V. CA LACORTE v. INCIONG

Complainants were hired as security guards by
petitioner Solgus; they were dismissed on various Lacorte, an employee of ASEAN Fabricators Inc, was
grounds, some due to probationary employment, hired as a warehouseman whose duties were among
others due to abandonment, etc. The complaints for others, to receive and store the raw and junk materials
illegal dismissal of some complainants were dismissed used by respondent in its business.
due to the Affidavits of Desistance allegedly executed
by them. Petitioner offered to purchase some obsolete,
defective and non-usable junk materials from
Was the dismissal based on the affidavits of respondent. When complainant tried to bring out these
desistance proper? NO. items he was accosted by respondent's security guard
Respondents deny having executed the affidavits. The and in the course of the investigation, it was
rule is that when the voluntariness of the execution of discovered that the items sought to be brought out by
Page 80 of 124
complainant weighed more than what he actually petition. At any rate, his evidence does not
purchased. : substantiate his claim.
The purpose of the proceedings before the fiscal is to
determine if there is sufficient evidence to warrant the QUIAMBAO v. NLRC
prosecution and conviction of the accused.
In assessing the evidence before him, the fiscal

considers the basic rule that to successfully convict the
accused the evidence must be beyond reasonable
doubt and not merely substantial. On the other hand, 12. Good Faith of Employee
to support findings and conclusion of administrative
bodies, only substantial evidence is required.
AZUCENA:
It does not follow that once the fiscal dismisses the Automation reduction of the number of
complaint for qualified theft, respondent officials workers in a companys factory because of
should also have decided in favor of petitioner. For new machinery or labor-saving devices is
one, the evidence presented before the two bodies justified. This is management prerogative.
may not be necessarily identical.
Redundancy where the services of an
employee are in excess of what is reasonably
Secondly, the appreciation of the facts and evidence demanded by the actual requirements of the
presented is an exercise of discretion on the part of enterprise. A position is redundant where it is
administrative officials over which one cannot impose
superfluous. This is affected by several factors
his conclusion on the other.
such as: overhiring of workers, decreased
volume of business, dropping or phasing out
As we have already ruled, "the conviction of an of a particular product line. However,
employee in a criminal case is not indispensable to management must show adequate proof that
warrant his dismissal, and the fact that a criminal the abolished positions were unnecessary.
complaint against the employee has been dropped by
the fiscal is not binding and conclusive upon a labor Retrenchment valid only when the following
tribunal. requisites are met:
a. intended to prevent losses and such
It is intimated by respondents that the respondent losses are proven
company conducted its investigation on the alleged
theft before filing the criminal charges and the b. written notices are served on the workers
application for clearance, and only after having been and DOLE at least 30 days before the
convinced of the veracity of the reported attempt to effective date of retrenchment
steal. That the company investigated the incident first
c. separation pay is paid
while allowing petitioner to stay on his job pending the
investigation is not only proper but in accord with fair Standards of retrenchment:
process. That the investigation took time is
understandable, considering that it was not the only a. losses expected should be substantial and
preoccupation of respondent corporation. not merely de minimis in extent
b. substantial loss must be reasonably
Finally, petitioner claims that on January 22, 1977, imminent
when the company reportedly caught petitioner
c. retrenchment must be reasonably
attempting to spirit away some brand new and usable
company property, there was no actual weighing and necessary and likely to effectively prevent
examination of the boxes containing the scrap the expected losses
materials. Suffice it to say that it is now too late in the
day for petitioner to raise these matters of facts in this
Page 81 of 124
d. the alleged losses must be proven by petitioner gets designated as Acting Salesman for
sufficient evidence respondents soft drinks and other beverages. On one
of his stints as a soft drinks salesman, he smuggled
Criteria (whom to retrench) out thirty extra cases of soft drinks. He was terminated
a. less preferred status (temporary by the company.
employees) Petitioner asserted that he was taking the cases in
good faith and that there was no substantial evidence
b. efficiency rating against him.
c. seniority
Closure or Cessation - a company facing Several factors militate against petitioners claim of
serious business decline and loss is allowed to good faith. Petitioners length of service, which spans
close its business in order to avoid further almost fifteen (15) years, works against his favor in
this case. We have held that the longer an employee
economic loss; however, even if the business
stays in the service of the company, the greater is his
is not losing but its owner, for reasons of his responsibility for knowledge and compliance with the
own, wants to stop doing business, he in good norms of conduct and the code of discipline in the
faith can do so anytime. No law compels company. He did not follow the standard operating
anybody to stay in business. procedure in taking the extra thirty cases of coke (if he
was indeed getting them in good faith). Also, Petitioner
Cessation of business NOT due to business was described to have left the plant premises without
losses is subject to three requisites: stopping at the gates for the mandatory inspection.
His suspicious actions, thus, prompted the dispatch of
a) service of a written notice to
security to pursue his truck. All in all, the court held
employees and to DOLE at least 1 month that the dismissal of the petitioner was not illegal and
before intended date was for just cause.
b) cessation of business operations
must be bona fide in character
c) payment of employees termination
E. Reliefs/Remedies in Illegal Dismissal
pay
Art. 279. Security of tenure. In cases of regular

Separation pay is not required for employees employment, the employer shall not terminate the
of a business closed down by financial losses. services of an employee except for a just cause or
Relocating the business to a place to which when authorized by this Title. An employee who is
the employees cannot or do not want to reinstatement without loss of seniority rights and other
transfer may be considered as cessation of privileges and to his full backwages, inclusive of
business. It is not closure or cessation on allowances, and to his other benefits or their monetary
account of serious business losses. equivalent computed from the time his compensation
was withheld from him up to the time of his actual
There is no law requiring the purchaser to reinstatement.
absorb the employees of a selling company.
Merger a succession of employment rights
and obligations has occurred.
Art. 223. Appeal. Decisions, awards, or orders of the
Labor Arbiter are final and executory unless appealed
to the Commission by any or both parties within ten
(10) calendar days from receipt of such decisions,
CRUZ v COCA-COLA BOTTLERS awards, or orders. Such appeal may be entertained
only on any of the following grounds:
Petitioner Cruz has been working for respondent

companys plant as a driver/helper. At times, however,
Page 82 of 124
If there is prima facie evidence of abuse of discretion

on the part of the Labor Arbiter; 1. In General
If the decision, order or award was secured through

LOPEZ v NLRC
fraud or coercion, including graft and corruption;
Lopez allegedly uttered indecent and obscene remarks
If made purely on questions of law; and against respondent Fr. Lao. She denied the accusation
and in turn accused Fr. Lao of embarrassing and
humiliating her. As a consequence, she was
If serious errors in the findings of facts are raised dismissed.
which would cause grave or irreparable damage or
injury to the appellant.
In general, the remedy for illegal dismissal is the
In case of a judgment involving a monetary award, an
reinstatement of the employee to his former position
appeal by the employer may be perfected only upon
without loss of seniority rights and the payment of
the posting of a cash or surety bond issued by a
backwages. But there may be instances as when
reputable bonding company duly accredited by the
reinstatement is not a viable remedy as where as in
Commission in the amount equivalent to the monetary
this case the relations between the employer and the
award in the judgment appealed from.
employee have been so severely strained that it is not
advisable to reinstatement
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated employee, insofar
as the reinstatement aspect is concerned, shall Article 279 of the Labor Code, provides that "an
immediately be executory, even pending appeal. The employee who is unjustly dismissed from work shall be
employee shall either be admitted back to work under entitled to reinstatement without loss of seniority rights
the same terms and conditions prevailing prior to his and other privileges and to his full backwages,
dismissal or separation or, at the option of the inclusive of allowances, and to his other benefits or
employer, merely reinstated in the payroll. The posting their monetary equivalent computed from the time his
of a bond by the employer shall not stay the execution compensation was withheld from him up to the time of
for reinstatement provided herein. his actual reinstatement."
To discourage frivolous or dilatory appeals, the

Commission or the Labor Arbiter shall impose Pursuant to the said rule, illegally dismissed
reasonable penalty, including fines or censures, upon employees are entitled to reinstatement and full
the erring parties. backwages. The phraseology of the law means that
both reliefs are available to the illegally dismissed
employee as a matter of course. However, if
In all cases, the appellant shall furnish a copy of the
reinstatement is not possible, the employees are
memorandum of appeal to the other party who shall
entitled to the grant of separation pay and full
file an answer not later than ten (10) calendar days
backwages. The reliefs of separation pay and
from receipt thereof.
backwages are cumulative, not alternative remedies.
The Commission shall decide all cases within twenty
(20) calendar days from receipt of the answer of the
appellee. The decision of the Commission shall be
final and executory after ten (10) calendar days from
receipt thereof by the parties. UNITED FIELD SEA v. REQUILLO (2006)
The issue between the parties stemmed from the
Any law enforcement agency may be deputized by the
transfer of private respondents to offices located in
Secretary of Labor and Employment or the
Commission in the enforcement of decisions, awards other provinces following an adverse decision against
or orders. petitioner as regards the complaint filed by the
employees for not remitting their SSS contributions
Page 83 of 124
Labor Arbiter rendered a decision finding separated. The person reinstated assumes the
complainants dismissal illegal. The NLRC position he had occupied prior to his dismissal.
subsequently modified the Labor Arbiter's Decision,
deleting the Labor Arbiter's awards for backwages, Reinstatement means restoration to the former
damages, and attorney's fees. Respondent employees position occupied prior to dismissal or to substantially
filed a petition for certiorari before the CA, alleging that equivalent position. Reinstatement does not mean
the NLRC gravely abused its discretion in giving due promotion. Promotion is based primarily on an
course to petitoners appeal filed beyond the employees performance during a certain period. Just
reglementary period. The CA granted respondents' because their contemporaries are already occupying
higher positions does not automatically entitle
petition and set aside the Resolution of the NLRC.
respondents to similar positions.
WON the CA erred in holding that petitioners'
appeal to the NLRC was filed beyond the
reglementary period COMPOSITE ENTERPRISES V. CAPAROSO
NO, ART. 223 of the Labor Code provides:

Petitioner is engaged in the distribution and/or supply
Appeals. Decisions, awards, or orders of the Labor of confectioneries to various retail establishments
Arbiter are final and executory unless appealed to the within the Philippines. Emilio Caparoso and Joeve P.
Commission by any or both parties within ten (10) Quindipan (respondents) were employed as its
calendar days from receipt of such decisions, awards, deliverymen until they were terminated on October 8,
or orders, 1999. Respondents filed a complaint for illegal
dismissal against petitioner with the National Labor
The right to appeal is not part of due process but a Relations Commission (NLRC). Petitioner denied that
mere statutory privilege that has to be exercised respondents were illegally dismissed, alleging that
only in the manner and in accordance with the they were employed on a month-to-month basis and
provisions of law. Since the perfection of an appeal that they were terminated as a result of the expiration
within the statutory reglementary period is not only of their contracts of employment.
mandatory but also jurisdictional, petitioners' failure to
perfect their appeal to the NLRC seasonably rendered The Labor Arbiter found that respondents were illegally
the Labor Arbiter's Decision final and executory. dismissed and ordered among other things their
reinstatement. NLRC found that there was no illegal
dismissal.
a. Reinstatement
WON NLRC decision finding that respondents

1. Definition were illegally dismissed affected their right to
accrued salaries pending appeal.
No, it did not.
ASIAN TERMINALS, INC. vs VILLANUEVA
Article 223 (3rd paragraph) of the Labor Code, and

Employees won against employer for illegal dismissal. Section 2 of the NLRC Interim Rules on Appeals under
Court ordered their reinstatement but they filed R.A. No. 6715, Amending the Labor Code, provide
another complaint saying that they were not reinstated that an order of reinstatement by the Labor Arbiter is
to the job level they previously occupied. immediately executory even pending appeal. The
Court cited the rationale for this rule as:
WON their employer reinstated respondents to their

former or equivalent positions. Yes. In authorizing execution pending appeal of the
reinstatement aspect of a decision of the Labor Arbiter
reinstating a dismissed or separated employee, the
Reinstatement means restoration to a state or law itself has laid down a compassionate policy which,
condition from which one had been removed or once more, vivifies and enhances the provisions of the
Page 84 of 124
1987 Constitution on labor and the working man. co-employees; or, (3) where a strained relationship
These duties and responsibilities of the State are exists between the employer and the dismissed
imposed not so much to express sympathy for the employee.
workingman as to forcefully and meaningfully
underscore labor as a primary social and economic
force, which the Constitution also expressly affirms
2. Exceptions
with equal intensity. Labor is an indispensable partner
for the nations progress and stability. with respect to
decisions reinstating employees, the law itself has
determined a sufficiently overwhelming reason for its JOHNSON & JOHNSON (PHILS), INC V. JOHNSON
execution pending appeal. Then, by and pursuant to OFFICE & SALES UNION-FFW (2007)
the same power (police power), the State may
authorize an immediate implementation, pending
appeal, of a decision reinstating a dismissed or Bonsol and Hirondo were employed by Johnson &
separated employee since that saving act is designed Johnson (J&J). Said employees violated company
to stop, although temporarily since the appeal may be procedure and were dismissed. They filed a case of
decided in favor of the appellant, a continuing threat or illegal dismissal against J&J. NLRC held that the
danger to the survival or even the life of the dismissed
employees were not guilty of serious misconduct or
or separated employee and his family
willful disobedience, hence they were entitled to
reinstatement or payment of separation pay.
The Court further pointed out that Reinstatement is the
restoration to a state or condition from which one has
been removed or separated. The intent of the law in J&J manifested its willingness to pay separation pay,
making a reinstatement order immediately executory is but the employees insisted upon their reinstatement.
much like a return-to-work order, i.e., to restore the NLRC issued a resolution ordering reinstatement.
status quo in the workplace in the meantime that the
issues raised and the proofs presented by the Then,
by and pursuant to the same power (police power), the
State may authorize an immediate implementation, WHETHER it is the employer or the employee who
pending appeal, of a decision reinstating a dismissed has the right to choose between separation pay and
or separated employee since that saving act is reinstatement? NEITHER.
designed to stop, although temporarily since the
appeal may be decided in favor of the appellant, a
continuing threat or danger to the survival or even the Ultimately, it is the NLRC who has the authority to
life of the dismissed or separated employee and his execute its judgment and settle any issue arising from
family contending parties have not yet been finally its implementation. In this case, NLRC issued a
resolved. It is a legal provision which is fair to both
subsequent resolution ordering reinstatement of the
labor and management because while execution of the
order cannot be stayed by the posting of a bond by the employees. NLRC upheld the primacy of reinstatement
employer, the workers also cannot demand their as the available relief on the finding that the
physical reinstatement if the employer opts to reinstate employees were illegally dismissed.
them only in the payroll.
An illegally dismissed employee is entitled to

Payment of separation pay as a substitute for reinstatement as a matter of right. However, case law
reinstatement is allowed only under exceptional
has developed such that where reinstatement is no
circumstances, viz: (1) when reasons exist which are
not attributable to the fault or are beyond the control of longer feasible or practical (as when it would only
the employer, such as when the employer -- who is in exacerbate the tension and strained relations between
severe financial strait, has suffered serious business the parties, or when there are irreconcilable
losses, and has ceased operations -- implements differences between the parties), it is more prudent to
retrenchment, or abolishes the position due to the order separation pay instead of reinstatement.
installation of labor-saving devices; (2) when the
illegally dismissed employee has contracted a disease
and his reinstatement will endanger the safety of his
Page 85 of 124
Thus payment of separation pay in lieu of While it may be true that petitioners continued to work
reinstatement shall be allowed if and only if the in the same place and office as in their previous
employer can prove the existence of circumstances employment, it is equally true that they had in fact
showing that reinstatement will no longer be for the been illegally dismissed by their previous employer.
mutual benefit of the parties. J&J was not able to Thus, they lost their former work status and benefits in
prove strained relations. Hence, the dismissed a manner violative of the law. Thus, they became new
employees should be reinstated. employees of the latter firm and, as such, were
deprived of seniority and other employment benefits
they had when they were still with their former
a. Closure of Business employer.
2) Rodolfo Murillo was not the employer of petitioners
RETUYA v. DUMARPA when they were dismissed from Insular Builders, Inc.
It was not he but Antonio Murillo who dismissed them,
Insular Builders was a family-owned corporation
as evidenced by the Dismissal Report submitted to the
managed by the father-son team of Antonio and
DOLE. In fact, Rodolfo himself was dismissed
Rodolfo Murillo. Petitioners worked for the corporation.
together with them. piercing the corporate veil and
There was a feud between the father and the son so
considering Insular and Queen City as one entity
that Antonio discharged Rodolfo from his position; the
would be disadvantageous to petitioners, because
petitioners were then told to temporarily stop working;
doing so would no longer entitle them to back wages
Antonio later dismissed them and reported to DOLE.
and separation pay. Indeed, if the two entities were
Petitioners continued working but under a different
one and the same company, then there would have
company which was managed and controlled by
been no dismissal from one and transfer to the other to
Rodolfo. They filed a complaint for illegal dismissal,
speak about.
averring that they were terminated from employment
without prior notice and also in absence of any valid b. Economic Business Conditions
cause. They alleged that their termination was an off-
shoot of the supposed personal rift and disagreements
UNION OF SUPERVISORS v. THE SECRETARY OF
between the Murillos.
LABOR
1) WoN petitioners are entitled to full back wages and
separation pay in accordance with Article 279 of the
Labor Code The president of the Union was illegally dismissed and
the Court ruled for his reinstatement. The successor of
2) WoN employer-employee relationship existed the bank refused to take him bank contending that the
between them and Rodolfo Murillo. position of branch manager requires trust and
1) Illegally dismissed employees were entitled to full confidence, which the president of the union has not
back wages that should not be diminished or reduced yet earned.
by the amount they had earned from another
employment during the period of their illegal
dismissal. While litigating, employees must still earn a Reinstatement is a restoration to a state from which
one has been removed or separated. It is the return to
living. Furthermore, as penalty for their illegal
the position from which he was removed and
dismissal, their employers must pay them full back assuming again the function of the office already held.
wages. Petitioners were dismissed because of a This is a remedy for violations of the rights of workers
change of management. They were not given any such as unfair labor practice. Yet, the reinstatement
prior written notice, but were simply told that their remedy must always be adapted to economic-
services were terminated, entitling them to backwages business conditions.
under Art. 279. Full backwages should be construed
to mean: without deducting from backwages the Considering the present economic-business conditions
earnings derived elsewhere by the concerned together with the economic crisis, the honest intention
employee during the period of his illegal dismissal. of the bank to be efficient and productive must be
Page 86 of 124
upheld and given effect. Mr Luna, however, may be which provides that in the absence of a retirement
reinstated to a substantially equivalent position without plan, an employee may be retired upon reaching the
loss of seniority rights and the present branch age of 60. An employee may retire or may be retired
manager may continue with his tested competence
by employer upon reaching 60. Also, considering that
and integrity in the management of the San Juan
Branch of the Republic Planter's Bank. Espejo had already reached the statutory retirement
age of 60, he is entitled only to backwages and not to
separation pay. Separation pay is awarded in order to
c. Employees Unsuitability benefit an EE during the transitional period undergone
before locating a replacement job; such does not apply
to an already retired EE.
DIVINE WORD HIGH vs. NLRC
e. Antipathy and Antagonism Strained

Catenza was a teacher at Divine Word. She was
dismissed because of the "misdeeds" and "immoral Relations
acts" of her husband Pablo Catenza, then the principal
of petitioner school.
CAPITOL MEDICAL CENTER, INC. V. MERIS
Complainant was illegally dismissed. However, the SC
hesitated to order her reinstatement as a high school Dr. Meris terminated when the hospital decided to
teacher in the petitioner high school, which is a close their Industrial Service Unit. The lower courts
Catholic institution, serving the educational and moral found bad faith in the dismissals because they were
needs of its Catholic studentry. While herself innocent, unable to prove the business losses and found illegal
the continued presense of Mrs. Catenza as a teacher
dismissal. They decided for separation fee in lieu of
in the school may well be met with antipathy and
antagonism by some sectors in the school community. reinstatement.
The SC upheld the decision citing that reinstatement is
not feasible in the case of strained relations or when
d. Employees Retirement/Overage the position the employee formerly held no longer
exists.
WESTMONT v. SAMANIEGO
ESPEJO V. NLRC
[SUPRA PAGE 59 ]
Espejo was the General Manager of CISP and granted
the use of a company car as one of his privileges. The
Company Board resolved to sell some of its properties,
including the car assigned to Espejo, in order to put up 3. Offer to reinstate
the needed capital requirement set by the Insurance
Commission. Espejo objected to the sale and then
tendered his resignation. Afterwards, he orally revoked RANARA v. NLRC
said resignation but the same was not heeded, and his
resignation was made effective.
Petitioner Carlos Ranara had been working as a driver
Should Espejo be reinstated? NO. Should he be with Oro Union Construction Supply, one of the herein
awarded separation pay and backwages? Separation private respondents, when he was told by Fe Leonar,
pay, no. Backwages, yes. secretary of the other private respondent, Jimmy Ting
Chang, not to come back the following day.
An employee held to be illegally dismissed cannot be
reinstated if he had already reached the age of 60.
The law recognizes valid any retirement plan, He reported for work as usual on November 11, 1989,
but was surprised to find some other person handling
agreement or mgt policy regarding retirement at an
the vehicle previously assigned to him.
earlier age. Absent any retirement plan, Sec. 13 Book
4 of the Omnibus Rules implementing the LC applies
Page 87 of 124
The Court rejects the falsity of private respondents' The two decisions are:
claim that the petitioner had not been illegally (1) Even if the order of reinstatement of the
dismissed and in fact abandoned his work. Labor Arbiter is reversed on appeal, it is
obligatory on the part of the employer to
reinstate and pay the wages of the
Neither can Ranara's rejection of Chang's offer to
dismissed employee during the period of
reinstate him be legally regarded as an abandonment
appeal until reversal by the higher court.
because the petitioner had been placed in an
On the other hand, if the employee has been
untenable situation that left him with no other choice.
reinstated during the appeal period and such
reinstatement order is reversed with finality,
Given the smallness of the private respondents' staff, the employee is not required to reimburse
Ranara would have found it uncomfortable to continue whatever salary he received for he is entitled
working under the hostile eyes of the employer who to such, more so if he actually rendered
had been forced to reinstate him. services during the period.
(2) If the decision of the labor arbiter is later
reversed on appeal upon the finding that the
The fact that his employer later made an offer to re- ground for dismissal is valid, then the
employ him did not cure the vice of his earlier arbitrary employer has the right to require the
dismissal. The wrong had been committed and the dismissed employee on payroll
harm done. reinstatement to refund the salaries s/he
received while the case was pending appeal,
or it can be deducted from the accrued
benefits that the dismissed employee was
4. Payroll reinstatement entitled to receive from his/her employer under
existing laws, collective bargaining agreement
provisions, and company practices. However,
GARCIA v PAL if the employee was reinstated to work during
the pendency of the appeal, then the
employee is entitled to the compensation
The petitioners in this case were caught sniffing shabu received for actual services rendered without
when a team of company security personnel and law need of refund. (This is called the Genuino
enforcers raided the PAL Technical Centers Toolroom view.)
Section. Administrative charges were filed against
such personnel and afterwards they were dismissed. The court upheld the first view. First, there is a dearth
The petitioners filed a case for illegal dismissal. The of cases supporting the Genuino case while there has
Labor Arbiter ruled in favor of the petitioners ordering been a cantena of cases supporting the first view.
PAL to, inter alia, immediately comply with the Second, the first view supports social justice better
reinstatement aspect of the decision. PAL appealed to than the second as it furthers the interest of the laborer
the NLRC and the NLRC reversed the Labor Arbiter, more than the genuine view. The first view is also
dismissing the case for illegal dismissal. more faithful to the letter of the law.
The Court here reaffirms the prevailing principle that

The issue in the case is whether or not PAL can still be even if the order of reinstatement of the Labor Arbiter
held liable for the money claims of the petitioners is reversed on appeal, it is obligatory on the part of the
between the time where the appeal to the NLRC was employer to reinstate and pay the wages of the
still pending as the law states that decision of the dismissed employee during the period of appeal until
Labor Arbiter of reinstatement is immediately reversal by the higher court.
executory.
The court here discusses the divergent decisions

concerning reinstatement pending appeal or, 5. Reinstatement as interim relief when
particularly, the option of payroll reinstatement (see applicable
paragraph 3 of Article 223 of the Labor Code).
Page 88 of 124
the ones granted in the decision of the court below, the

failure of the LA and the public respondent NLRC to
award backwages to the private respondent, who is
LANSANGAN v AMKOR TECHNOLOGY PHILS. INC legally entitled thereto, amounts to a "plain error"
which may be rectified in the present petition, although
private respondent Dagui did not bring any appeal
Amkor investigated the anonymous email stating
regarding the matter, in the interest of substantial
petitioners were stealing company time. In
handwritten letters, petitioners admitted their justice.
wrongdoing and were later terminated for "extremely The Supreme Court is clothed with ample authority
serious offenses" as defined in its Code of Discipline. to review matters, even if they are not assigned as
errors on appeal, if it finds that their consideration
Article 223 concerns itself with an interim relief, is necessary in arriving at a just decision of the
granted to a dismissed or separated employee while case.
the case for illegal dismissal is pending appeal. It does
not apply where there is no finding of illegal dismissal, It must be remembered that backwages and
as in the present case. reinstatement are two reliefs that should be given to
an illegally dismissed employee. They are separate
and distinct from each other. An illegally dismissed
The Arbiter found petitioners dismissal to be valid. employee is entitled to (1) either reinstatement, if
Such finding had, as stated earlier, become final,
viable, or separation pay if reinstatement is no longer
petitioners not having appealed it. Petitioners are not
entitled to full backwages as their dismissal was not viable, and (2) backwages.
found to be illegal.
ST. MICHAEL'S INSTITUTE vs SANTOS

b. Backwages
Employees illegally dismissed won separation pay.
The Court of Appeals added backwages even though
1. Effect of Failure to Order
such damages was not filed/appealed in court.
AURORA LAND v. NLRC (1997) WON backwages should be awarded. Yes.

Private respondent Dagui was hired by the
Tanjangcos in 1953 to take charge of the maintenance Article 279 of the Labor Code, as amended, mandates
and repair of apartments and residential buildings. In that an illegally dismissed employee is entitled to the
1981, private respondent Dagui received the shock of twin reliefs of (a) either reinstatement or separation
his life when Mrs. Quazon suddenly told him: "Wala ka pay, if reinstatement is no longer viable, and (b)
nang trabaho mula ngayon," on the alleged ground backwages. Both are distinct reliefs given to alleviate
the economic damage suffered by an illegally
that his work was unsatisfactory.
dismissed employee and, thus, the award of one does
The Labor Arbiter and the NLRC was united in holding not bar the other. Both reliefs are rights granted by
that private respondent Dagui was illegally dismissed, substantive law which cannot be defeated by mere
awarding separation pay sans backwages. Private procedural lapses. Substantive rights like the award of
backwages resulting from illegal dismissal must not be
respondent Dagui did not appeal the omission
prejudiced by a rigid and technical application of the
committed by the lower courts. Petitioners however rules.
assailed the decision of the NLRC.
WON respondent Dagui may be entitled the
2. Computation
affirmative relief of backwages
YES, while as a general rule, a party who has not
appealed is not entitled to affirmative relief other than MERCURY DRUG CO. V. CIR
Page 89 of 124
in filing said case by respondents should not be

included in computation for backwages.
Private respondent Nardo Dayao was employed on
February 13, 1956 by the petitioners originally as
driver, later assigned as delivery man, then as checker The Court ratiocinated thus:
and was last promoted to the position of assistant chief
checker in the checking department until his
separation on April 10, 1961. It is true that unfair labor practice charge with the
prayer for reinstatement with back wages should be
filed within a reasonable period of time. But laches,
Days before April 10, 1961, Dayao in vain urged herein like estoppel, should also be alleged as a defense in
petitioners to pay them overtime pay, criticized their, the answer, otherwise the same is considered
employees' association for failing to protect the welfare renounced. Petitioners failed to expressly allege the
of the employees by not securing such additional same in their answer to the ULP charge, in their
compensation for overtime, and campaigned among memorandum and in their motion for reconsideration
his co-employees to organize another labor union. of the CIR decision. However, the lapse of two years
Hearing of Dayao's union activities, petitioner Mariano and 15 days from the dismissal from the service to the
Que called for Dayao on April 10, 1961, told him to filing of the ULP charge is not an unreasonable period
resign and persuaded him to accept the amount of of time under the circumstances.
P562.50 as termination pay and to sign a clearance
stating to the effect that he has no claims whatsoever
of any kind and nature against herein petitioners. In this respect, the statute of limitations prescribed by
the Civil Code of the Philippines should apply in the
absence of any other specific legal provision. Article
On April 25, 1963, exactly two years and fifteen days 1146 of the Civil Code of the Philippines directs that
from his separation on April 10, 1961, Dayao filed a the action upon an injury to the rights of the plaintiff
complaint for unfair labor practice against herein must be instituted within four years. An action upon a
petitioners for dismissing him because of his having contract should be filed within 10 years (Art. 1144,
campaigned among his co-employees to become CCP). All other actions whose periods are not fixed in
members of a new labor union that he was then the Civil Code or in other laws must be brought within
organizing. In their answer dated May 10, 1963 to the five years from the time the right of action accrues (Art.
ULP complaint, herein petitioners interposed as their 1149, CCP). Whether the ULP charge is based on an
only defense that Dayao "was separated from the injury to the rights of Dayao or placed under the
service ... for cause because of creating trouble with category of all other actions for which no law
another employee who was also dismissed and that prescribes the time limit for their institution, the filing by
even if the said complainant was separated for cause, respondent Dayao of the ULP charge against herein
he received compensation pay and hereby relieved petitioners was well within either the prescriptive
respondent from whatever claim or claims that he had period.
against respondents." Subsequently, the issue of the
time of filling was raised.
BUSTAMANTE V. NLRC (1996)
The Supreme Court ultimately ruled for respondents,
finding that they were illegally dismissed, the reason
for dismissal being their attempting to form another In an MFR, private respondent Evergreen Farms
labor union. The question remaining is whether the moves to reconsider the SC decision ordering the
action was filed on time. award of backwages to petitioners. The company
contends that in the computation of the backwages to
be awarded, the salary earned by petitioners
WON action was filed within the reasonable period
and when said reasonable period should be elsewhere should be deducted.
pegged; and from when should be backwages be
computed.
WON in the award of backwages to an illegally
dismissed employee, salary earned elsewhere during
Case was filed within the reasonable time. Given the period of illegal dismissal should be deducted?
the 4-year prescriptive period, the two-year delay NO.
Page 90 of 124
ratification of an addendum to an existing CBA which

was intended to effect a reduction in their leave
History of computation of backwages:
benefits of fifteen (15) days for every year of service,
they were subjected to acts of harassment and alleged
RA 875 or the Industrial Peace Act The Court of that that their transfer to a provincial post constituted a
Industrial Relations (CIR) was given discretion to case of constructive dismissal.
grant, disallow, or reduce backpay. WoN the computation of backwages should begin from
dismissal up to reinstatement instead of from the
finding by the court of illegal dismissal.
Itogon-Syoc Mines, Inc v Sangilo-Itogon Workers
Union (1968) Earnings derived elsewhere during the The computation of backwages should begin from
period of illegal dismissal should be deducted from the dismissal up to reinstatement.
award of backwages. Reason: Unjust enrichment of Petitioner avers that the CA committed an error of law
employees and double compensation. in ordering payment of backwages from dismissal up
to reinstatement instead of ordering backwages only
from the time the CA ruled that there was illegal
Mercury Drug Co Inc v CIR (1978) Fixed amount of
dismissal. Petitioner is mistaken. In the first place, the
backwages. Reason: Expediency. To avoid employee
CA never ordered the reinstatement of respondents
idleness or delay in payment by employer.
but instead ordered the payment of separation pay. As
to issue of backwages, where an employee would
3-year Backwages Rule Adopted from J. have been entitled to reinstatement with full
Teehankees dissent in the Mercury case backwages, but circumstances, i.e., strained
relationships, makes reinstatement impossible, the
more equitable disposition would be an award of
Labor Code (1974) Art 279 on security of tenure separation pay equivalent to at least one month pay, or
made mandatory the award of backwages to illegally one month pay for every year of service, whichever is
dismissed employees. HOWEVER, the courts still higher, in addition to full backwages, inclusive of
applied the 3-year rule. allowances, and other benefits or their monetary
equivalent, computed from the time the employees
compensation was withheld from him up to the time of
RA 6715 amending the Labor Code (1989) Art 279 his supposed actual reinstatement. In this case, since
now mandates the award of FULL backwages. payment of backwages and separation pay were
ordered only upon promulgation of the CA Decision,
and the case was further elevated to this Court, then
In conformity with the legislative intent expressed in
the supposed actual reinstatement, had reinstatement
RA 6715 to give more benefits to workers, the Court
been feasible, would have been upon the finality of this
held that as a general rule, backwages should NOT be
Courts decision.
reduced by the earnings derived by the employee
elsewhere during the period of his illegal dismissal. The computation of full backwages, inclusive of
The reason is that the employee, during the litigation, allowances, and other benefits or their monetary
must still earn a living to support himself and his equivalent, should be computed from the time the
family, while full backwages have to be paid by the respondents compensation was withheld from them
employer as part of the penalty he has to pay for up to the time of the finality of this decision.
illegally dismissing his employee.
CANDANO SHIPPING LINES, INC., v. SUGATA-ON

STAR PAPER CORP. v. ESPIRITU
Complainants worked for Star Paper Corp (SPC) in The husband of the respondent was presumably dead
various capacities. They claimed that for failure to sign after the ship where he was a crew sank. The
Page 91 of 124
respondent refused to award death benefits in favor of have used to support his dependents or heirs. Hence,
the respondent forcing her to institute a civil suit to the Court deducts from his gross earnings the
recover death benefits and damages. necessary expenses supposed to be used by the
deceased for his own needs.
In computing the third factor, the necessary living
The Court held that, pursuant to the case of Floresca
expense, a survey of more recent jurisprudence shows
v. Philex Mining Company, the employees may invoke
that this Court consistently pegged the amount at 50%
either the Workmens Compensation Act or the
of the gross annual income. The Court held in Smith
provisions of the Civil Code, subject to the
Bell Dodwell Shipping Agency Corp. v. Borja, that
consequence that the choice of one remedy will
when there is no showing that the living expenses
exclude the other and that the acceptance of the
constituted the smaller percentage of the gross
compensation under the remedy chosen will exclude
income, we fix the living expenses at half of the gross
the other remedy. The exception is where the claimant
income.
who had already been paid under the Workmens
Compensation Act may still sue for damages under the
Civil Code on the basis of supervening facts or
developments occurring after he opted for the first
remedy. 3. Fringe Benefits
The Court deems it best to adopt the formula for ACESITE vs. NLRC
loss of earning capacity enunciated in the case of Villa
Rey v. Court of Appeals, in computing the amount of
Gonzales was hired as Chief Security of petitioner. He
actual damages to be awarded to the claimant under
already used up all his leaves. While on his VL, he
Article 1711 of the New Civil Code.
filed for an emergency leave. Petitioner denied such
application but Gonzales claims that the telegram of
The formula for the computation of unearned income such denial did not reach him on time. Gonzales did
is: not report for work for the succeeding days, again
claiming he did not receive petitioners telegrams
ordering him to report for work. He was thereafter
Net Earning Capacity = life expectancy x (gross dismissed.
annual income - reasonable and necessary living
expenses). Gonzales was illegally dismissed. He cannot be
considered to have willfully disobeyed his employer. As
such, he is entitled to fringe benefits or their
Life expectancy is determined in accordance with the equivalent.
formula:
Aritcle 279, LC provides that:
xxx An employee who is unjustly
2 / 3 x [80 age of deceased at the time of dismissed from work shall be entitled to
death] reinstatement without loss of seniority
rights and other privileges and to his full
backwages, inclusive of allowances, and
Jurisprudence provides that the first factor, i.e., life to his other benefits or their monetary
expectancy, shall be computed by applying the formula equivalent computed from the time his
(2/3 x [80 - age at death]) adopted in the American compensation was withheld from him up to
Expectancy Table of Mortality or the Actuarial of the time of his actual reinstatement.
Combined Experience Table of Mortality.
In the computation of the second factor, it is
computed by multiplying the life expectancy by the net 2. Damage and Attorneys Fees
earnings of the deceased, i.e., the total earnings less
expenses necessary in the creation of such earnings
or income and less living and other incidental PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORP
expenses. v. NLRC
The loss is not equivalent to the entire earnings of [PAGE 7]
the deceased, but only such portion that he would
Page 92 of 124
REYES V. CA 3. Separation Pay

Reyes was the General Manager of Philmalay whose
services were terminated due to retrenchment. Reyes HA YUAN RESTAURANT v. NLRC
was offered a separation pay by Philmalay which
Reyes rejected. He then filed a complaint claiming, [PAGE 46]
among others, moral and exemplary damages on
account of Philmalays alleged bad faith in refusing to
award Reyes his various claims. The appellate court
had ruled that the award of attorneys fees should be AMKOR TECHNOLOGY PHILIPPINES, INC. V.
10% of the salary, vacation and sick leave and 13 th JUANCO
month differential excluding the amount of separation Employee opted to avail of the voluntary retirement
pay. package and was paid and dismissed accordingly.
Is Reyes entitled to the damages sought? NO. Is the Later she filed for illegal dismissal claiming that she
award of attorneys fees correct? NO. was coerced into signing the agreement.
Moral damages are recoverable only where the act The court held that the employee was a highly
complained of is tainted by bad faith or fraud, or where educated person and it was unlikely that she was
it is oppressive to labor, and done in a manner coerced into signing anything. Furthermore she was
contrary to morals, good customs, or public policy. provided over 3 million and backwages in the
Moral damages not entitled as respondents were not agreement. What likely happened was she was unable
shown to have acted in bad faith for the company did to find work after retiring and so she filed for illegal
offer to pay separation pay except that the same was dismissal. <I think this is an example of a kind of
not acceptable for Reyes. separation pay.>
Reyes is entitled to attorneys fees equivalent to 10% CENTRAL PANGASINAN ELECTRIC
of his total monetary award; separation pay COOPERATIVE v. NLRC
included and not just his salary, vacation and sick Cagampan received a check amounting to P100,831
leave pay, and 13th month pay differential. There are from Aurora B. Bonifacio as partial payment for the
two commonly accepted concepts of attorney's fees, installation of a transformer in her building and expansion
ordinary and extraordinary. In the first, attorneys fee is of a three-phase line. He did not issue a receipt and
the reasonable compensation paid to a lawyer by his consequently terminated.
client for the legal services rendered. In the second,
attorneys fees are deemed indemnity for damages Section 7, Rule I, Book VI of the Omnibus Rules
ordered by the court to be paid by the losing party in a Implementing the Labor Code provides that when the
litigation. The extraordinary concept of attorneys employee is dismissed for any of the just causes under
fees is the one contemplated in Article 111 of the Article 282 of the Labor Code, he shall not be entitled
Labor Code which provides that In cases of unlawful to termination pay without prejudice to applicable
withholding of wages, the culpable party may be collective bargaining agreement or voluntary employer
assessed attorneys fees equivalent to ten percent of policy or practice.
the amount of wages recovered Theres no need to
show that the employer acted maliciously or in bad Separation pay shall be allowed only in those
faith when it withheld the wages. It is enough that it is instances where the employee is validly dismissed for
shown that the lawful wages were not paid causes other than serious misconduct or those
accordingly, as in this case. reflecting on his moral character.
ELCEE FARMS INC. v. NLRC Separation pay in such case is granted to stand as a
measure of social justice.
[PAGE 54]
Page 93 of 124
If the cause for the termination of employment cannot It should be pointed out that an order of reinstatement
be considered as one of mere inefficiency or by the labor arbiter is not the same as actual
incompetence but an act that constitutes an utter reinstatement of a dismissed or separated employee.
Thus, while the employer continuously fails to actually
disregard for the interest of the employer or a palpable
implement the reinstatement aspect of the decision of
breach of trust in him, the grant by the Court of the labor arbiter, their obligation to respondents,
separation benefits is hardly justifiable. insofar as accrued backwages and other benefits are
In this case, private respondent was found by the Labor concerned, continues to accumulate. It is only when
the illegally dismissed employee receives the
Arbiter and the NLRC to have been validly dismissed for
separation pay that it could be claimed with certainty
violations of company rules, and certain acts that the employer-employee relationship has formally
tantamount to serious misconduct. ceased thereby precluding the possibility of
Such findings, if supported by substantial evidence, are reinstatement. In the meantime, the illegally dismissed
employees entitlement to backwages, 13th month pay,
accorded respect and even finality by this Court.
and other benefits subsists. Until the payment of
separation pay is carried out, the employer should not
be allowed to remain unpunished for the delay, if not
a. Backwages and Separation Pay, Distinct outright refusal, to immediately execute the
Reliefs reinstatement aspect of the labor arbiters decision.
TRIAD SECURITY and ALLIED SERVICES v PALTENG v. UCPB

ORTEGA
After conducting an audit, it was found that Palteng

A case for illegal dismissal was decided against the committed several offenses under the Employee
petitioners. The petitioners now contend that with Discipline Code in connection with Mercados Past
respondents receipt of their separation pay, they had Due Domestic BP. After hearing and investigation, the
opted not to seek reinstatement to their former jobs committee recommended Paltengs dismissal. She
and elected instead to sever their employment. was dismissed with forfeiture of all benefits.
Petitioner also points out that respondents have
already found other jobs. Thus, petitioners maintain
that there is no more basis to hold them liable for the An employee who is illegally dismissed from work is
accrued backwages stated in the 30 September 2002 entitled to reinstatement without loss of seniority rights,
computation of the lower courts. and other privileges as well as to full backwages,
inclusive of allowances, and to other benefits or their
monetary equivalent computed from the time his
As the law now stands, an illegally dismissed compensation was withheld from him up to the time of
employee is entitled to two reliefs, namely: backwages his actual reinstatement.
and reinstatement. These are separate and distinct
from each other. However, separation pay is granted
where reinstatement is no longer feasible because of However, in the event that reinstatement is no longer
strained relations between the employee and the possible, the employee may be given separation pay
employer. In effect, an illegally dismissed employee is instead.
entitled to either reinstatement, if viable, or separation
pay if reinstatement is no longer viable and
backwages. Notably, reinstatement and payment of backwages are
distinct and separate reliefs given to alleviate the
economic setback brought about by the employees
Backwages and separation pay are, therefore, distinct dismissal. The award of one does not bar the other.
reliefs granted to one who was illegally dismissed from Backwages may be awarded without reinstatement,
employment. The award of one does not preclude that and reinstatement may be ordered without awarding
of the other as this court had, in proper cases, ordered backwages.
the payment of both.
Page 94 of 124
b. Computations/Rationale the purpose of computing separation pay. YES.

(Santos v. NLRC)
In the computation of back wages and separation pay,
BUSINESS DAY INFO & SERVICE v. NLRC (1993)
account must be taken only of the basic salary of
Petitioner BSSI was engaged in the manufacture and petitioner but also of her transportation and emergency
sale of computer forms. As retrenchment measure, living allowances. Commissions are also included in
some plant employees including private respondents the term wage under Art. 97 (f) Salary:
were laid off and were paid one-half (1/2) month pay recompense/consideration made to a person for his
for every year of service. BSSI retained some pains or industry in another mans business. If the
employees in an attempt to rehabilitate its business. opposite view was adopted so that commissions do
Barely two months and a half later, these remaining not form part of wage/salary then it will be tantamount
employees were likewise discharged because the to saying that this type of salesmen do not receive any
company decided to cease business operations salary and therefore are not entitled to separation pay
altogether. Unlike the private respondents, the next in the event of termination from employment which
batch of employees received separation pay would not be in accordance with the spirit of labor laws
equivalent to a full months salary for every year of and would contravene the purpose of separation pay
service plus mid-year bonus. which was intended to alleviate the difficulties which
WON respondents should be entitled to the same confront a dismissed employee thrown to the streets to
amount of separation pay face the harsh necessities of life.
YES, granting that the 1st set of termination was a c. Effect on Receipt
retrenchment scheme and the 2nd set was due to
closure, the law requires the granting of the same
SAN MIGUEL CORPORATION vs JAVATE
amount of separation benefits to the affected
employees in any of the cases. Article 283 of the
Labor Code, as amended, protects workers whose Private respondent filed a complaint against the
employment is terminated because of closure of the petitioner with the Department of Labor challenging
establishment or reduction of personnel. therein his illegal dismissal effected in the guise of a
compulsory retirement. He has allegedly already
The law requires an employer to extend equal received the money.
treatment to its employees. It may not, in the guise of
management prerogative, grant greater benefits to
some and less to others. Management prerogatives WON the employee is estopped from assailing his
dismissal (assuming he has already received his
are not absolute but are subject to legal limits,
separation pay as San Miguel alleged). Yes.
collective bargaining agreements or general principles
of fair play and justice.
There is no merit to petitioner's contention that private
SONGCO v. NLRC
respondent is estopped from assailing his retirement
as he has accepted the benefits under the retirement
plan. Private respondent vehemently denied this
F.E. Zuellig filed with DOLE an application seeking contention, and the filing of the complaint for illegal
clearance to terminate the service of Songco et al., on dismissal indisputably strengthens such denial.
the ground of retrenchment due to financial losses.
Parties agreed that the main issue is the basis of
separation pay due to the petitioners. They were in the Furthermore, even assuming arguendo that private
respondent indeed received his retirement benefits, it
sales force of Zuellig and received monthly salaries of
does not estop him from questioning the legality of his
at least P.4,000 in addition to the commissions they dismissal.
received for every sale they made.
Employees who received their separation pay are not
WoN the commission and allowances should be barred from contesting the legality of their dismissal.
included in the monthly salary of Songco et al for The acceptance of those benefits would not amount to
Page 95 of 124
estoppel as held in the leading case of Mercury Drug applied, the justification for the grant of separation pay
Co. vs. CIR (56 SCRA 694). and the amount or rate of such award. has not been
consistent. The Court, thus, made distinctions. Where
it comes to such valid but not iniquitous causes as
4. Financial Assistance failure to comply with work standards, the grant of
separation pay to the dismissed employee may be
both just and compassionate, particularly if he has
When Allowed/Not Allowed worked for some time with the company. Under such
circumstances, the award to the employee of
separation pay would be sustainable under the social
PLDT VS. NLRC justice policy even if the separation is for cause.
Separation pay shall be allowed as a measure of
social justice only in those instances where the
employee is validly dismissed for causes other than
Marilyn Abucay, a traffic operator of the Philippine
serious misconduct or those reflecting on his moral
Long Distance Telephone Company (PLDT), was
character. A contrary rule would have the effect of
accused by two (2) complainants of javomg demanded
rewarding rather than punishing the erring employee
and received from the the total amount of P3,800 in
for his offense. The policy of social justice is not
consideration of her promise to facilitate approval of
intended to countenance wrongdoing simply because
their applications for telephone installation.
it is committed by the underprivileged.
Investigated and heard, she was found guilty as
charged and accordingly separated from the service.
She went to the Ministry of Labor and Employment
5. Indemnity
claiming she had been illegally removed. After the
evidence and arguments of the parties were
considered, the company was sustained and the
complaint was dismissed for lack of merit. The Labor SERRANO v. NLRC
Arbiters decision, however, awarded financial AGABON v. NLRC
assistance to Abucay equivalent to one month of pay
for every year of service. Both Abucay and PLDT [PAGE 68]
appealed to the National Labor Relations Borad, which
upheld the decision in toto. PLDT filed a petition for
certiorari before the Supreme Court. The Supreme 6. Liability of Corporate Officers
Court granted the petition, affirming the decision of the
Board except for the grant of separtation pay in the
form of financial assistance, which was disallowed. AZUCENA:
Reinstatement restores the employee who
Whether Abucay is entitled to financial assistance / was unjustly dismissed to the position from
separation pay even if she was removed from which he was removed
employment for just case, on the basis of equity and
compassion and due to previous decisions of the Backwages allows the same employee to
Supreme Court. recover from the employer the wages he lost
because of his dismissal
The rule embodied in the Labor Code is that a person Reinstatement and backwages are distinct
dismissed for cause (as defined therein) is not entitled and separate forms of relief. There can be
to separation pay. The case of Firestone Tire vs. reinstatement without backwages or
Lariosa, Soco vs. Mercantile Corporation of Davao, backwages without reinstatement.
Filipino Inc. vs. NLRC, and others, constitute the
exception, based upon considerations of equity. Equity Where there is reinstatement, there is no
has been defined as justice outside law, being ethical break in the length of service of an employee
rather than jural and belonging to the sphere of morals (no loss of seniority rights and other privileges)
than of law. Hence, it cannot prevail against the
express provision of the labor laws allowing dismissal Strained relations may bar reinstatement
of employees for cause and without any provision for when the relationship between employer and
separation pay. Still, where the exception has been
Page 96 of 124
employee has been severely strained by Exemplary damages may be awarded only if
reason of their respective imputations of bad the dismissal was effected in a wanton,
faith against each other, to order reinstatement oppressive or malevolent manner.
would no longer serve any prudent purpose.
As a rule, company officials cannot be held
Separation pay may be had in lieu of
personally liable for damages for an
reinstatement. The strained relations
employees illegal dismissal. The corporation
doctrine must however be strictly applied so
has a personality separate and distinct from
as not to deprive an illegally dismissed
that of its officers who act merely as agents.
employee of his right to reinstatement.
The exception is where there is bad faith or
Reinstatement is immediately executory, even malice on the part of such company officers in
pending an appeal by the employer. However, dismissing an employee.
it is not self-executory. In other words, a writ of
execution must still be sought and issued.
Reinstatement pending appeal may either be:
PETRON CORPORATION V. NLRC (2006)
a) Actual reinstatement under the
same terms and conditions prevailing
before dismissal Private respondent Mantos was Petrons Bulk Plant
b) Payroll reinstatement at the Relief Supervisor within the Visayas area. Co-
option of the employer petitioner Maligro is his immediate supervisor.
Backwages granted on grounds of equity for

earnings which a worker or employee has lost Mantos was suspended for 30 days because of his
due to his illegal dismissal AWOL. He filed a complaint for illegal dismissal
Mercury Drug rule limiting the recoverable against Petron AND/OR Maligro, claiming he was
backwages to 3 years salary and the practice constructively dismissed. Subsequently, Mantos was
of deducting any amount which the employer altogether terminated for his continued absences and
has earned elsewhere during the period of for making false accusations against Maligro. The
illegal dismissal have been abrogated by the Court ruled that Mantos was illegally dismissed and
amendment to the Labor Code introduced by found Petron liable.
RA 6715. FULL backwages is now required to
be paid, inclusive of allowances and other
WON Maligro is solidarily liable with Petron for the
benefits and privileges or their monetary
money claims awarded to Mantos? NO.
equivalent.
Pursuant to the social justice provisions in our
Constitution, separation pay as financial A corporation has a legal personality separate and
assistance may still be ordered by the Court in distinct from that of its corporate officers. Thus,
instances where the employee is validly obligations incurred by corporate officers acting as
dismissed for causes other than serious corporate agents are not theirs but the direct
misconduct or those reflecting on the accountabilities of the corporations they represent.
employees moral character (theft, illicit sexual
relations, habitual intoxication).
Solidary liability may only be incurred by corporate
Moral damages are recoverable only where officers in exceptional circumstances such as when a
the dismissal was attended by bad faith or corporate officer terminates an employee with
fraud or constituted an act oppressive to labor apparent bad faith or malice.
or was done in a manner contrary to morals,
good customs or public policy.
Page 97 of 124
That Maligro himself was the committee chairman in

the investigating committee is not itself sufficient to
impute bad faith on his part. Maligro was after all
Mantos immediate supervisor, hence it is but logical
for the former to be part of the investigating committee.
Furthermore, there is no proof that Maligro, as
chairman, unduly influenced the other committee
members to side against Mantos. Mantos was not able
to clearly establish the bad faith of Maligro who must
therefore be absolved of liability.
CARAG v. NLRC
[PAGE 65]
Page 98 of 124
V. RETIREMENT RETIREMENT PLAN IN THE ESTABLISHMENT
Art. 287. Retirement. Any employee may be retired

upon reaching the retirement age established in the Section 1. Article 287 of Presidential Decree No.
collective bargaining agreement or other applicable 442, as amended, otherwise known as the Labor Code
employment contract. of the Philippines, is hereby amended to read as
follows:
In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have "Art. 287. Retirement. - Any employee may be retired
earned under existing laws and any collective upon reaching the retirement age established in the
bargaining agreement and other agreements: collective bargaining agreement or other applicable
Provided, however, That an employees retirement employment contract.
benefits under any collective bargaining and other
agreements shall not be less than those provided "In case of retirement, the employee shall be entitled
therein. to receive such retirement benefits as he may have
earned under existing laws and any collective
In the absence of a retirement plan or agreement bargaining agreement and other agreements:
providing for retirement benefits of employees in the Provided, however, That an employee's retirement
establishment, an employee upon reaching the age of benefits under any collective bargaining and other
sixty (60) years or more, but not beyond sixty-five (65) agreements shall not be less than those provided
years which is hereby declared the compulsory herein.
retirement age, who has served at least five (5) years
in the said establishment, may retire and shall be "In the absence of a retirement plan or agreement
entitled to retirement pay equivalent to at least one-half providing for retirement benefits of employees in the
(1/2) month salary for every year of service, a fraction establishment, an employee upon reaching the age of
of at least six (6) months being considered as one sixty (60) years or more, but not beyond sixty-five (65)
whole year. years which is hereby declared the compulsory
retirement age, who has served at least five (5) years
Unless the parties provide for broader inclusions, the in the said establishment, may retire and shall be
term one-half (1/2) month salary shall mean fifteen entitled to retirement pay equivalent to at least one-half
(15) days plus one-twelfth (1/12) of the 13th month pay (1/2) month salary for every year of service, a fraction
and the cash equivalent of not more than five (5) days of at least six (6) months being considered as one
of service incentive leaves. whole year.
Retail, service and agricultural establishments or "Unless the parties provide for broader inclusions, the
operations employing not more than ten (10) term one-half (1/2) month salary shall mean fifteen
employees or workers are exempted from the (15) days plus one-twelfth (1/12) of the 13th month pay
coverage of this provision. and the cash equivalent of not more than five (5) days
of service incentive leaves.
Violation of this provision is hereby declared unlawful "Retail, service and agricultural establishments or
and subject to the penal provisions under Article 288 of operations employing not more than (10) employees or
this Code. workers are exempted from the coverage of this
provision.
"Violation of this provision is hereby declared unlawful

REPUBLIC ACT NO. 7641 - RETIREMENT PAY LAW
and subject to the penal provisions provided under
Article 288 of this Code."
AN ACT AMENDING ARTICLE 287 OF
PRESIDENTIAL DECREE NO. 442, AS AMENDED,
Sec. 2. Nothing in this Act shall deprive any
OTHERWISE KNOWN AS THE LABOR CODE OF
employee of benefits to which he may be entitled
THE PHILIPPINES, BY PROVIDING FOR
under existing laws or company policies or practices.
RETIREMENT PAY TO QUALIFIED PRIVATE
SECTOR EMPLOYEES IN THE ABSENCE OF ANY
Sec. 3. This Act shall take effect fifteen (15) days
Page 99 of 124
after its complete publication in the Official Gazette or activities performed by a farmer or on a farm as
in at least two (2) national newspapers of general incident to or in conjunction with such farming
circulation, whichever comes earlier. operations, but does not include the manufacture
and/or processing of sugar, coconut, abaca, tobacco,
RULES IMPLEMENTING THE NEW RETIREMENT pineapple, aquatic or other farm products.
LAW
SECTION 3. Retirement under CBA/contract.
Retirement Benefits
3.1 Any employee may retire or be retired by his
SECTION 1. General Statement on Coverage. This employer upon reaching the retirement age
Rule shall apply to all employees in the private sector, established in the collective bargaining agreement or
regardless of their position, designation or status and other applicable employment contract or retirement
irrespective of the method by which their wages are plan subject to the provisions of Section 5 hereof on
paid, except to those specifically exempted under the payment of retirement benefits.
Section 2 hereof. As used herein, the term Act shall
refer to Republic Act No. 7641 which took effect on 3.2 In case of retirement under this Section, the
January 7, 1993. employee shall be entitled to receive such retirement
benefits as he may have earned under existing laws
SECTION 2. Exemptions. This Rule shall not apply and any collective bargaining agreement and other
to the following employees: agreements; provided, however, that an employees
retirement benefits under any collective bargaining and
other agreements shall not be less than those provided
2.1 Employees of the National Government and its
under this Rule, and provided further that if such
political subdivisions, including Government-owned
benefits are less, the employer shall pay the difference
and/or controlled corporations, if they are covered by
between the amount due the employee under this Rule
the Civil Service Law and its regulations.
and that provided under the collective or individual
agreement or retirement plan.
2.2 Domestic helpers and persons in the personal
service of another. (Deleted by Department Order No.
3.3 Where both the employer and the employee
20 issued by Secretary Ma. Nieves R. Confessor on
contribute to a retirement fund in accordance with an
May 31, 1994.)
individual or collective agreement or other applicable
employment contract, the employers total contribution
2.3 Employees of retail, service and agricultural thereto shall not be less than the total retirement
establishment or operations regularly employing not benefits to which the employee would have been
more than ten (10) employees. As used in this sub- entitled had there been no such retirement fund. In
section; case the employers contribution is less than the
retirement benefits provided under this Rule, the
(a) Retail establishment is one principally engaged in employer shall pay the deficiency.
the sale of goods to end-users for personal or
household use. It shall lose its retail character qualified SECTION 4. Optional; Compulsory Retirement.
for exemption if it is engaged in both retail and
wholesale sale of goods.
4.1 Optional Retirement. In the absence of a
retirement plan or other applicable agreement
(b) Service establishment is one principally engaged providing for retirement benefits of employees in an
in the sale of service to individuals for their own or establishment, an employee may retire upon reaching
household use and is generally recognized as such. the age of sixty (60) years or more if he has served for
at least five (5) years in said establishment.
(c) Agricultural establishment/operations refers to an
employer which is engaged in agriculture. This terms 4.2 Compulsory Retirement. Where there is no such
refers to all farming activities in all its branches and plan or agreement referred to in the immediately
includes among others, the cultivation and tillage of the preceding subsection, an employee shall be retired
soil, production, cultivation, growing and harvesting of upon reaching the age of sixty-five (65) years.
any agricultural or horticultural commodities, dairying,
raising of livestock or poultry, the culture of fish and
4.3 Upon retirement of an employee, whether optional
other aquatic products in farms or ponds, and any
Page 100 of 124
or compulsory, his services may be continued or for determination of the salary for fifteen days shall be
extended on a case to case basis upon agreement of their average daily salary (ADS), subject to the
the employer and employee. provisions of Rule VII-A, Book III of the Rules
Implementing the Labor Code on the payment of
4.4 Service Requirement. The minimum length of wages of workers who are paid by results. The ADS is
service in an establishment or with an employer of at the average salary for the last twelve (12) months
least five (5) years required for entitlement to reckoned from the date of their retirement, divided by
retirement pay shall include authorized absences and the number of actual working days in that particular
vacations, regular holidays and mandatory fulfillment period.
of a military or civic duty.
SECTION 6. Exemption from tax. The retirement
SECTION 5. Retirement Benefits. pay provided in the Act may be exempted from tax if
the requirements set by the Bureau of Internal
Revenue under Sec. 2 (b) item (1) of Revenue
5.1 In the absence of an applicable agreement or
Regulations No. 12-86 dated August 1, 1986 are met,
retirement plan, an employee who retires pursuant to
to wit: Pensions, retirement and separation pay.
the Act shall be entitled to retirement pay equivalent to
Pensions, retirement and separation pay constitute
at least one-half month salary for every year of service,
compensation subject to withholding, except the
a fraction of at least six(6) months being considered as
following:
one whole year.
(1) Retirement benefits received by officials and

5.2 Components of One-half Month Salary. For the
employees of private firms under a reasonable private
purpose of determining the minimum retirement pay
benefit plan maintained by the employer, if the
due an employee under this Rule, the term one-half
following requirements are met:
month salary shall include all of the following:
(i) The benefit plan must be approved by the Bureau of

(a) Fifteen (15) days salary of the employee based on
Internal Revenue;
his latest salary rate. As used herein, the term salary
includes all remunerations paid by an employer to his
employees for services rendered during normal (ii) The retiring official or employee must have been in
working days and hours, whether such payments are the service of the same employer for at least ten (10)
fixed or ascertained on a time, task, piece of years and is not less than fifty (50) years of age at the
commission basis, or other method of calculating the time of retirement; and
same, and includes the fair and reasonable value, as
determined by the Secretary of Labor and (iii) The retiring official or employee shall not have
Employment, of food, lodging or other facilities previously availed of the privilege under the retirement
customarily furnished by the employer to his benefit plan of the same or another employer.
employees. The term does not include cost of living
allowances, profit-sharing payments and other SECTION 7. Penal Provision. It shall be unlawful for
monetary benefits which are not considered as part of any person or entity to circumvent or render ineffective
or integrated into the regular salary of the employees. the provisions of the Act. Violations thereof shall be
subject to the penal provisions provided under Article
(b) The cash equivalent of not more than five (5) days 288 of the Labor Code of the Philippines.
of service incentive leave;
SECTION 8. Relation to agreements and regulations.
(c) One-twelfth of the 13th month pay due the Nothing in this Rule shall justify an employer from
employee. withdrawing or reducing any benefits, supplements or
payments as provided in existing laws, individual or
(d) All other benefits that the employer and employee collective agreements or employment practices or
may agree upon that should be included in the policies.
computation of the employees retirement pay.
All rules and regulations, policy issuances or orders
5.3 One-half month salary of employees who are paid contrary to or inconsistent with these rules are hereby
by results. For covered workers who are paid by repealed or modified accordingly.
results and do not have a fixed monthly rate, the basis
Page 101 of 124
SECTION 9. Effectivity. This Rule took effect on served at least five (5) years as underground mine
January 7, 1993 when the Act went into force. worker, may retire and shall be entitled to all the
retirement benefits provided for in this Article.
"Retail, service and agricultural establishments or

REPUBLIC ACT NO. 8558 operations employing not more than ten (10)
employees or workers are exempted from the
AN ACT AMENDING ARTICLE 287 OF coverage of this provision.
PRESIDENTIAL DECREE NO. 442, AS AMENDED,
OTHERWISE KNOWN AS THE LABOR CODE OF "Violation of this provision is hereby declared unlawful
THE PHILIPPINES BY REDUCING THE and subject to the penal provisions provided under
RETIREMENT AGE OF UNDERGROUND MINE Article 288 of this Code.
WORKERS FROM SIXTY (60) TO FIFTY (50).
"Nothing in this Article shall deprive any employee of
benefits to which he may be entitled under existing
laws or company policies or practices."
Section 1. Article 287 of Presidential Decree No. 442,
Sec. 2. This Act shall take effect fifteen (15) days after
as amended, otherwise known as the Labor Code of
its complete publication in the Official Gazette or in at
the Philippines, is hereby amended to read as follows:
least two (2) national papers of general circulation,
"ART. 287. Retirement. Any employee may be whichever comes earlier.
retired upon reaching the retirement age established in
the collective bargaining agreement or other applicable
employment contract.
"In case of retirement, the employee shall be entitled IBC v. AMARILLA

to receive such retirement benefits as he may have IBC was sequestered by the government which took
earned under existing laws and any collective over its management and operations from its owner,
bargaining agreement and other agreements:
Roberto Benedicto. In December 1986, the
Provided, however, That an employee's retirement
benefits under any collective bargaining and other government and Benedicto entered into a temporary
agreements shall not be less than those provided agreement under which the latter would retain its
herein. management and operation. PCGG and Benedicto
executed a Compromise Agreement, where Benedicto
"In the absence of a retirement plan or agreement transferred and assigned all his rights, shares and
providing for retirement benefits of employees in the
interests in petitioner station to the government. In the
establishment, an employee upon reaching the age of
sixty (60) years or more, but not beyond sixty-five (65) meantime, the four 4 employees retired from the
years which is hereby declared the compulsory company and received, on staggered basis, their
retirement age, who has served at least five (5) years retirement benefits under the 1993 CBA. In the
in the said establishment, may retire and shall be meantime, a P1,500.00 salary increase was given to
entitled to retirement pay equivalent to at least one-half all employees of the company, current and retired,
(1/2) month salary for every year of service, a fraction effective July 1994. However, when the four retirees
of at least six (6) months being considered as one
demanded theirs, petitioner refused and instead
whole year.
informed them via a letter that their differentials would
"Unless the parties provide for broader inclusions, the be used to offset the tax due on their retirement
term one-half (1/2) month salary shall mean fifteen benefits
(15) days plus one-twelfth (1/12) of the 13th month pay
(1) WoN the retirement benefits of respondents are
and the cash equivalent of not more than five (5) days
of service incentive leaves. part of their gross income; and
(2) WoN petitioner is estopped from reneging on its
"An underground mining employee upon reaching the agreement with respondent to pay for the taxes on
age of fifty (50) years or more, but not beyond sixty
said retirement benefits
(60) years which is hereby declared the compulsory
retirement age for underground mine workers, who has
Page 102 of 124
1) Yes. Under the CBA, it is not obliged to pay for Reyes retired from his employment and is now
the taxes on the respondents retirement benefits; contesting the amount of separation pay given to him.
also, under the NIRC, the retirement benefits of
respondents are part of their gross income subject The commissions paid to petitioner were in the nature
to taxes. For the retirement benefits to be exempt of profit-sharing payments and should therefore not be
from the withholding tax, the taxpayer is burdened included in the computation for retirement benefits.
to prove the concurrence of the following elements: The overriding commissions paid to him could not
(1) a reasonable private benefit plan is maintained have been sales commissions in the same sense that
by the employer; (2) the retiring official or employee Philippine Duplicators paid its salesmen sales
has been in the service of the same employer for at commissions. The additional payments were not sales
least 10 years; (3) the retiring official or employee is commissions but rather partook of the nature of profit-
not less than 50 years of age at the time of his sharing payments and had no clear, direct or
retirement; and (4) the benefit had been availed of necessary relation to the amount of work he actually
only once performed.
2) No. Estoppel may arise from a making of a
promise if it was intended that the promise should
be relied upon and, in fact, was relied upon, and if a For the purpose of computing retirement pay, one-half
refusal to sanction the perpetration of fraud would month salary shall include all of the following:
result to injustice. The mere omission by the
promisor to do whatever he promises to do is
1) 15 days salary based on the latest
sufficient forbearance to give rise to a promissory
salary rate;
estoppel. An agreement to pay the taxes on the
retirement benefits as an incentive to prospective 2) cash equivalent of 5 days of service
retirees and for them to avail of the optional incentive leave (or vacation leave);
retirement scheme is not contrary to law or to public 3) 1/12 of the 13th month pay;
morals. Petitioner had agreed to shoulder such
taxes to entice them to voluntarily retire early, on its 4) other benefits as may be agreed upon
belief that this would prove advantageous to it. by employer and employee for
inclusion.
JACULBE v. SILLIMAN UNIVERSITY

But, it shall not include the following:
The respondent compulsorily retired the petitioner

based on the retirement plan entered into by the 1) cost of living allowance;
employees upon commencing work for the 2) profit-sharing payments; and
respondent.
3) other monetary benefits which are not
considered as part of or integrated
Retirement plans allowing employers to retire into the regular salary of the
employees who are less than the compulsory employees
retirement age of 65 are not per se repugnant to the
constitutional guaranty of security of tenure. An
employer is free to impose a retirement age less than 1. Retroactive Application of RA 7641
65 for as long as it has the employees consent. Stated
conversely, employees are free to accept the
employers offer to lower the retirement age if they feel UNIVERSAL ROBINA SUGAR MILLING
they can get a better deal with the retirement plan CORPORATION (URSUMCO) v. Agripino
presented by the employer. However, the retirement CABALLEDA and Alejandro CADALIN
plan entered into by the petitioner is not voluntary.
Hence, she was illegally dismissed. Respondents were employed by petitioner URSUMCO
as welder and crane operator respectively. Upon
reaching the age of 60, they were allegedly forced to
REYES vs. NLRC retire. Initially, URSUMCO issued a memorandum
providing for a compulsory retirement age of 60.
Page 103 of 124
Subsequently, RA 7641 was enacted. After which, a

CBA was entered into which provided that the Oxales joined UNILAB Oxales joined UNILAB on
retirement benefits of the members of the collective September 1, 1968. He was compulsorily retired by
bargaining unit shall be in accordance with law. UNILAB when he reached his 60th birthday.
Can RA 7641 be given retroactive effect despite
existing employment contracts? YES. Oxales wrote UNILAB, claiming that he should have
RA 7641 is undoubtedly a social legislation. The law been paid P1,775,907.23 more in retirement pay and
has been enacted as a labor protection measure and unused leave credits. He insisted that his bonuses,
allowances and 13th month pay should have been
as a curative statute that -- absent a retirement plan
factored in the computation of his retirement benefits.
devised by, an agreement with, or a voluntary grant
from, an employer -- can respond, in part at least, to
the financial well-being of workers during their twilight (1) WoN the retirement plan should include
years soon following their life of labor. There should be commissions, overtime, bonuses or extra
little doubt about the fact that the law can apply to compensations in the computation of the basic salary
labor contracts still existing at the time the statute has of the retiring employee? No
taken effect, and that its benefits can be reckoned not
only from the date of the law's enactment but (2) WoN whether R.A. No. 7641 is applicable for
retroactively to the time said employment contracts purposes of computing his retirement benefits?
have started. There are 2 essential requisites in order
that R.A. 7641 may be given retroactive effect: (1) the
The clear language of the URP should be respected. A
claimant for retirement benefits was still in the employ
retirement plan in a company partakes the nature of a
of the employer at the time the statute took effect; and contract, with the employer and the employee as the
(2) the claimant had complied with the requirements contracting parties. It creates a contractual obligation
for eligibility for such retirement benefits under the in which the promise to pay retirement benefits is
statute. made in consideration of the continued faithful service
of the employee for the requisite period.
ENRIQUEZ SECURITY SERVICES, INC. V.
CABOTAJE
R.A. No. 7641 does not apply in view of the URP
Security agency hired cabotaje in 1979. It was
which gives to the retiring employee more than what
incorporated only in 1985. When cabotaje retired they the law requires; the supporting cases cited by Oxales
only applied retirement beginning from 1985, to which are off-tangent.
he filed suit. It was granted and the security company
then petitioned claiming that RA 7641 cannot be
applied retroactively, and only 1/12 of service incentive
leave pay. 3. Three Kinds of Retirement Plans
The law provides that in computing retirement the
period of employment before the promulgation of the
GERLACH v REUTERS
law in 1993 should be included. The law is social
legislation and a curative statute. Secondly the court
held that pursuant to sec 5.2 of RA 7641 the entire 5 Reuters hired Marilyn Odchimar Gerlach, petitioner, as
days of service incentive leave is awarded in the its local correspondent. Reuters implemented a local
computation. Retirement Benefit Plan for its Philippine-hired
employees. Petitioner was automatically covered by
the Plan by reason of her age and length of service.
2. When RA 7641 is inapplicable
Petitioner was assigned to various countries during her
employment in Reuters. Upon retirement, she now
OXALES v. UNILAB questions the computation of her retirement benefits.
Page 104 of 124
According to petitioner, the basis of the computation entire previous 18 years of service with petitioner,
should be her salary abroad and not the notional would simply be considered as non-existent.
Philippine salary.
It is very clear that from the very start of her first The P12,000.00 gratuity pay earlier awarded to Hilaria
assignment overseas, respondent apprised her that should not be deducted from the retirement benefits
the companys contribution to the Plan is based on her due her, the same is in order. Gratuity pay is separate
notional Philippine salary. In fact, under the Plan, the and distinct from retirement benefits. It is paid purely
companys contribution to the fund is 10% of the basic out of generosity.
monthly salary of each participant. Respondent also
informed petitioner of the amount of her notional
Philippine salary whenever she was transferred to her Retirement benefits, on the other hand, are intended
next overseas assignment or when there were to help the employee enjoy the remaining years of his
increases in her salary, both actual and notional. life, releasing him from the burden of worrying for his
Significantly, respondent was able to prove that it has financial support, and are a form of reward for his
been its practice worldwide that the notional salary of loyalty to the employer.
an employee is its basis in computing its contribution
to the retirement plan for a local employee detailed
abroad. It follows that the amount of retirement PAL v. AIRLINE PILOTS ASSOC. (2002)
benefits of a retiring employee assigned abroad is
based on his notional salary. The labor dispute between petitioner PAL and
respondent Airline Pilots Association of the Philippines
ALPAP stemmed from petitioner's act of unilaterally
retiring airline pilot Capt Collantes under the 1967
PAL-ALPAP Retirement Plan.
STA. CATALINA COLLEGE v. NLRC The Retirement Plan provided for two types of
retirement: (1) NORMAL RETIREMENT which
provides that any member who completed twenty (20)
Hilaria is insisting that her retirement benefits should years of service as a pilot for PAL or has flown 20,000
be computed on the basis of her thirty years of service, hours for PAL shall be eligible for normal retirement
inclusive of the period from 1955 to 1970; and that the
and (2) LATE RETIREMENT which provides that any
gratuity pay earlier given to her should not be
deducted therefrom. member who remains in the service of the Company
after his normal retirement date may retire either at his
option or at the option of the Company
Hilaria cannot be credited for her services in 1955-
1970. For, after her one year leave of absence expired WON the basis of the computation of Capt
in 1971 without her requesting for extension thereof as Collantes retirement benefits should be Art 287 of
in fact she had not been heard from until she the Labor Code and not the PAL-ALPAP
resurfaced in 1982 when she reapplied with petitioner Retirement Plan
school. Under the circumstances, abandonment of
work at petitioner school in 1971 is indubitably NO, the provisions of Article 287 of the Labor Code
manifest. could not have contemplated the situation of PALs
pilots. Rather, it was intended for those who have no
more plans of employment after retirement, and are
As Hilaria was considered a new employee when she thus in need of financial assistance and reward for the
rejoined petitioner school upon re-applying in 1982,
years that they have rendered service. A pilot who
her retirement benefits should thus be computed only
on the basis of her years of service from 1982 to 1997. retires after twenty years of service or after flying
20,000 hours would still be in the prime of his life and
at the peak of his career, compared to one who retires
JAM Transportation Co., Inc. v. Flores: Re-employment at the age of 60 years old. The parties provided for a
as a new employee would mean a demotion in rank special scheme of retirement different from that
and privileges, retirement benefits, for example, as his
contemplated in the Labor Code based on the peculiar
circumstance that PAL pilots are in.
Page 105 of 124
2000. In her Position Paper, she alleged that, assigned

at respondents EDSA-Balintawak Branch, EDSA,
4. Voluntary Retirement Balintawak, Quezon City, she had served the
respondent bank for 35 years when discharged. On
February 3, 2000, George L. Go, respondents
ARIOLA vs. PHILEX MINING CORPORATION Chairman of the Board, called her attention to the
complaint of client Antonio Jarina regarding an
accounting activities, involving her participation,
A voluntary retirement program was instituted by the which cost him considerable damage. It was about
employer to save on costs. It alleged that the bank checks, which were issued to Jarina in exchange
petitioners signed Deeds of Release and Quitclaim in for cash at a discounted rate -- all by means of his own
employers favor. capital. The scheme failed, resulting in his loss of
investments. The complainant explained on February
8, 2000, vehemently denying any knowledge of the
WON the complainants voluntarily retired from the
discounting activities. She was subsequently
company. (WON the waiver signed by petitioner is
dismissed with automatic forfeiture of benefits.
tantamount to voluntary resignation.) No.
The Labor Arbiter found that Caguioa was validly

Under Philex's Retirement Gratuity Plan, retirement
dismissed, it being a valid exercise of management
gratuity is paid not only to retiring employees but also
prerogative terminated her employment, finding her to
to those who, like petitioners, are dismissed for cause
have violated its Code of Conduct, Class D on Loyalty
'beyond their control such as retrenchment. Indeed,
and Class D on Honesty. NLRC reversed and set
Philex treated the 'retirement gratuity as petitioners'
aside the decision, which decision was affirmed by CA.
basic separation pay, which, with transportation
allowance, comprised their 'net separation [pay] as
indicated in Deeds of Release and Quitclaims
petitioners signed. Significantly, Philex paid petitioners
such separation pay after notifying them of their WON Caguioa was validly dismissed and WON her
retrenchment.[21] benefits were validly revoked
She was validly dismissed.
Philex's failure to submit other documents proving
petitioners' claimed retirement, such as their Petitioner bank found that Caguioa was guilty of
applications for retirement under Philex's early violations of its Code of Conduct, and that such
voluntary retirement program and their clearance slips, violations warranted her dismissal from the service
undermines its claim. The submission of these and constituted a just cause for terminating her
documents, which should indicate the reason for employment under Article 282(c) of the Labor Code.
petitioners' separation from service, would have put to Consequently, the Bankwide Evaluation Committee
rest any doubt on the cause of such separation. (BEC) decided to impose on her the principal penalty
of DISMISSAL FROM EMPLOYMENT with automatic
forfeiture of benefits.
Thus if, as in the present case, the intent to retire is
not clearly established or if the retirement is
involuntary, it is to be treated as a discharge. As the employer, petitioner bank has the burden of
proving the legality of respondents dismissal. The
petitioners case rises or falls on the strength of the
employers evidence, not on the weakness of the
5. Forfeiture of Benefits employees defense. The employer, however, needs
only to adduce substantial evidence, which has been
defined to be such relevant evidence that a reasonable
mind might accept as adequate to support a
EPCI BANK V. CAGUIOA
conclusion.
Senior Manager Generosa A. Caguioa was hired in

The records show that more than substantial evidence
May 1963. At the time of her dismissal on October 6,
supports the labor arbiters finding that respondent had
Page 106 of 124
direct participation in the check-discounting scheme, loyalty which he should have strengthened instead of
and that her dismissal was valid. betrayed.
The leniency sought by respondent on the basis of her

35 years of service to the bank must be weighed in
conjunction with the other considerations raised by 6. Retirement Pay/Differential
petitioners. As that service has been amply
compensated, her plea for leniency cannot offset her
dishonesty. Even government employees who are RIVERA v. UNILAB
validly dismissed from the service by reason of timely
discovered offenses are deprived of retirement Rivera was employed with Unilab as senior
benefits. Treating respondent in the same manner as manufacturing pharmacist. She later became Director
the loyal and code-abiding employees, despite the of UNILAB's Manufacturing Division. A year later,
timely discovery of her Code violations, may indeed UNILAB adopted a comprehensive retirement plan
have a demoralizing effect on the entire bank. Be it supported by a retirement fund, and under the plan, a
remembered that banks thrive on and endeavor to
member is compulsorily retired upon reaching the
retain public trust and confidence, every violation of
which must thus be accompanied by appropriate normal retirement date which is the date when the
sanctions. member has reached age 60 or has completed 30
years of service, whichever comes first. Rivera
completed 30 years of service and UNILAB retired her
SY V. METROBANK (2006) pursuant to the terms of the plan. At Rivera's request,
UNILAB allowed her to continue working for the
company; she was even promoted to AVP. 1992, the
Sy was a Metrobank branch manager. He was to be
company amended its retirement plan, providing,
considered compulsorily retired, having rendered 30
among others, for an increase in retirement benefits
years of service. However a 1-year term extension
from one (1) month to one-and-a-half (1.5) months of
was offered to him and he accepted. During his
terminal basic salary for every year of service. Rivera
extended term, the Bank found that Sy was conducting
asked that her retirement benefits be increased in
kiting activities which was prohibited. After finding his
accordance with the amended retirement program
explanation unsatisfactory, the Bank dismissed him.
which was denied.
Sy filed a case for illegal dismissal.
WoN petitioner's claim for additional retirement
benefits had not prescribed; and WoN she was entitled
The Court ruled that Sy was validly dismissed on the to retirement differential under the two different
ground of fraud and willful breach of trust. retirement plans.
No, it had not and No, she was not.
WON Sy is entitled to his retirement benefits? NO. Rivera's claim for retirement pay differential only
accrued on January 15, 1993 when she received her
retirement pay check.
Only unjustly dismissed employees are entitled to
retirement benefits. Since Sys dismissal was for a just Retirement in its ordinary signification is the
cause, he is not entitled to retirement benefits. To hold termination of an employees service upon reaching
otherwise would be to reward acts of willful breach of retirement age. Prior to the Retirement Pay Law (R.A.
trust by the employee. 7641), Article 287 of the Labor Code simply provided
that -
Any employee may be retired upon reaching the
While Sy has rendered 30 years of service to his retirement age established in the collective bargaining
employer, in this case, there is no room to accord him agreement or other applicable employment contract;
compassionate justice. He violated the bank policies the employee shall be entitled to receive such
prior to his compulsory retirement, reflecting a lack of retirement benefits as he may have earned under
Page 107 of 124
existing laws and any collective bargaining or other If the CBA provides for retirement benefits
agreement. greater than that under the Labor Code, the
"Retirement" as a fact carries with it certain legal benefit should be computed according to the
effects, one of which is the retired employees CBA formula.
termination of the services with the company as of the
retirement date
PHILIPPINE LONG DISTANCE TELEPHONE
Riveras retirement pay was computed; her accrued COMPANY, INC v. REUS
retirement benefits under Trust Fund A and Trust Fund
B of the plan were withdrawn, and deposited in Trust
The respondent was claiming retirement benefits after
Fund C from which she could make withdrawals. In he was dismissed due to shortages in his collection.
fact, Rivera did make several withdrawals from Trust The proceedings lasted for more than a decade with
Fund C debunking the question that Rivera accepted delays on the execution of the judgment in favor of the
her retirement and its benefits in 1988. respondent.
However, Rivera continued working beyond the
compulsory separation from service that resulted from The execution of the 1993 NLRC decision has long
her retirement. been overdue. It became final and executory more
than a decade ago when the Court dismissed the
The employment terms under this renewed petitions for certiorari filed by both the petitioner and
employment are based on what she and the company the respondent to assail the decision.
agreed upon. Whether these terms included renewed
coverage in the retirement plan is an evidentiary gap
that could have been conclusively shown by evidence On the issue of the equitable grant of the benefits of
of deductions of contributions to the plan after 1988. the retirement plan, whether such equitable grant is
Two indicators, however, tell us that no such coverage justified or not, legally correct or in error, or whether it
took place. The first is that the terms of the retirement is wise or unwise, are issues that are beyond the
plan, before and after its 1992 amendment, continued parties' reach at this time. The NLRC decision and the
to exclude those who have rendered 30 years of Courts affirmation of this decision cannot and should
service or have reached 60 years of age. Therefore, not be used as authority for issues relating to the
the plan could not have covered her. terms of the company retirement plan. The Court
merely affirms the finality of the NLRC's equitable
award and its terms, not any issue on the
6. Equitable Solution interpretation or application of, or the entitlement
under, the terms of the plan.
AZUCENA:
The retirement pay payable under Art 287 of
the Labor Code, as amended, is apart from
the retirement benefit claimable by the
qualified employee under the social security
law. This is so because RA 7641 in its Section
2 states that Nothing in this Act shall deprive
any employee of benefits to which he may be
entitled under existing law or company policies
or practices.
Compulsory retirement at an age below 60 is
allowable if the agreement is part of CBA
freely entered into and duly ratified by the
employees.
Page 108 of 124
Appendix members shall be three (3) years: Provided, That the

terms of the first six (6) appointive members shall be
one (1), two (2) and three (3) years for every two
A. SOCIAL SECURITY ACT OF 1997 members, respectively: Provided, further, That they
shall continue to hold office until their successors shall
have been appointed and duly qualified. All vacancies,
REPUBLIC ACT NO. 8282 prior to the expiration of the term, shall be filled for the
unexpired term only. The appointive members of the
Commission shall receive at least two thousand five
AN ACT FURTHER STRENGTHENING THE SOCIAL hundred pesos (P2,500.00) per diem for each meeting
SECURITY SYSTEM THEREBY AMENDING FOR actually attended by them but not to exceed Ten
THIS PURPOSE, REPUBLIC ACT NO. 1161, AS thousand pesos (P10,000.00) a month:: Provided,
AMENDED, OTHERWISE KNOWN AS THE SOCIAL That members of the Commission shall also receive a
SECURITY LAW. per diem of at least Two thousand five hundred pesos
(P2,500.00) but not to exceed Fifteen thousand pesos
(P15,000.00) a month: Provided , further, That said
SECTION 1. Republic Act No. 1161, as amended,
members of the Commission shall also receive
otherwise known as the "Social Security Law", is
reasonable transportation and representation
hereby further amended to read as follows:
allowances as may be fixed by the Commission, but
"SECTION 1. Short Title. - This Act shall be known as not to exceed Ten thousand pesos (P10,000.00) a
the "Social Security Act of 1997." month.
"SEC. 2. Declaration of Policy. - It is the policy of the "(b) The general conduct of the operations and
Republic of the Philippines to establish, develop, management functions of the SSS shall be vested in
promote and perfect a sound and viable tax-exempt the SSS President who shall serve as the chief
social security service suitable to the needs of the executive officer immediately responsible for carrying
people throughout the Philippines which shall promote out the program of the SSS and the policies of the
social justice and provide meaningful protection to Commission. The SSS President shall be a person
members and their beneficiaries against the hazards who has had previous experience in the technical and
of disability, sickness, maternity, old age, death, and administrative fields related to the purposes of this Act.
other contingencies resulting in loss of income or He shall be appointed by the President of the
financial burden. Towards this end, the State shall Philippines and shall receive salary to be fixed by the
endeavor to extend social security protection to Commission with the approval of the President of the
workers and their beneficiaries. Philippines, payable from the funds of the SSS.
"SEC. 3. Social Security System. - (a) To carry out the "(c) The Commission, upon the recommendation of the
purposes of this Act, the Social Security System, SSS President, shall appoint an actuary, and such
hereinafter referred to as SSS, a corporate body, with other personnel as may be deemed necessary, fix their
principal place of business in Metro Manila, Philippines reasonable compensation, allowances and other
is hereby created. The SSS shall be directed and benefits, prescribe their duties and establish such
controlled by a Social Security Commission, methods and procedures as may be necessary to
hereinafter referred to as Commission, composed of insure the efficient, honest and economical
the Secretary of Labor and Employment or his duly administration of the provisions and purposes of this
designated undersecretary, the SSS president and Act: Provided, however, That the personnel of the SSS
seven (7) appointive members, three (3) of whom shall below the rank of Vice-President shall be appointed by
represent the workers group, at least one of whom the SSS President: Provided, further, That the
shall be a woman; three (3), the employers group, at personnel appointed by the SSS President, except
least one (1) of whom shall be a woman; and one (1), those below the rank of assistant manager, shall be
the general public whose representative shall have subject to the confirmation by the Commission:
adequate knowledge and experience regarding social Provided, further, That the personnel of the SSS shall
security, to be appointed by the President of the be selected only from civil service eligibles and be
Philippines. The six (6) members representing workers subject to civil service rules and regulations: Provided,
and employers shall be chosen from among the finally, That the SSS shall be exempt from the
nominees of workers and employers organizations, provisions of Republic Act No. 6758 and Republic Act
respectively. The Chairman of the Commission shall No. 7430.
be designated by the President of the Philippines from
"SEC. 4. Powers and Duties of the Commission and
among its members. The term of the appointive
SSS. - (a) The Commission. - For the attainment of its
Page 109 of 124
main objectives as set forth in Section 2 hereof, the development and perfection of the program of the
Commission shall have the following powers and SSS;
duties: "(2) To require the actuary to submit a valuation report
"(1) To adopt, amend and rescind, subject to the on the SSS benefit program every four (4) years, or
approval of the President of the Philippines, such rules more frequently as may be necessary, to undertake
and regulations as may be necessary to carry out the the necessary actuarial studies and calculations
provisions and purposes of this Act; concerning increases in benefits taking into account
inflation and the financial stability of the SSS, and to
"(2) To establish a provident fund for the members
provide for feasible increases in benefits every four (4)
which will consist of voluntary contributions of
years, including the addition of new ones, under such
employers and/or employees, self-employed and
rules and regulations as the Commission may adopt,
voluntary members and their earnings, for the payment
subject to the approval of the President of the
of benefits to such members or their beneficiaries,
Philippines: Provided, That the actuarial soundness of
subject to such rules and regulations as it may
the reserve fund shall be guaranteed: Provided,
promulgate and approved by the President of the
further, That such increases in benefits shall not
Philippines;
require any increase in the rate of contribution;
"(3) To maintain a provident fund which consists of
"(3) To establish offices of the SSS to cover as many
contributions made by both the SSS and its officials
provinces, cities and congressional districts, whenever
and employees and their earnings, for the payment of
and wherever it may be expedient, necessary and
benefits to such officials and employees or their heirs
feasible, and to inspect or cause to be inspected
under such terms and conditions as it may prescribe;
periodically such offices;
"(4) To approve restructuring proposals for the
"(4) To enter into agreements or contracts for such
payment of due but unremitted contributions and
service and aid, as may be needed for the proper,
unpaid loan amortizations under such terms and
efficient and stable administration of the SSS;
conditions as it may prescribe;
"(5) To adopt, from time to time, a budget of
"(5) To authorize cooperatives registered with the
expenditures including salaries of personnel, against
cooperative development authority or associations
all funds available to the SSS under this Act;
registered with the appropriate government agency to
act as collecting agents of the SSS with respect to "(6) To set up its accounting system and provide the
their members: Provided, That the SSS shall accredit necessary personnel therefor;
the cooperative or association: Provided, further, That "(7) To require reports, compilations and analyses of
the persons authorized to collect are bonded; statistical and economic data and to make
"(6) To compromise or release, in whole or in part, any investigation as may be needed for the proper
interest, penalty or any civil liability to SSS in administration and development of the SSS;
connection with the investments authorized under "(8) To acquire and dispose of property, real or
Section 26 hereof, under such terms and conditions as personal, which may be necessary or expedient for the
it may prescribe and approved by the President of the attainment of the purposes of this Act;
Philippines; and
"(9) To acquire, receive, or hold, by way of purchase,
"(7) To approve, confirm, pass upon or review any and expropriation or otherwise, public or private property
all actions of the SSS in the proper and necessary for the purpose of undertaking housing projects
exercise of its powers and duties hereinafter preferably for the benefit of low-income members and
enumerated. for the maintenance of hospitals and institutions for the
"(b) The Social Security System. - Subject to the sick, aged and disabled, as well as schools for the
provision of Section four (4), paragraph seven (7) members and their immediate families;
hereof, the SSS shall have the following powers and "(10) To sue and be sued in court; and
duties:
"(11) To perform such other corporate acts as it may
"(1) To submit annually not later than April 30, a public deem appropriate for the proper enforcement of this
report to the President of the Philippines and to the Act.
Congress of the Philippines covering its activities in
the administration and enforcement of this Act during "SEC. 5. Settlement of Disputes. - (a) Any dispute
the preceding year including information and arising under this Act with respect to coverage,
recommendations on broad policies for the benefits, contributions and penalties thereon or any
other matter related thereto, shall be cognizable by the
Page 110 of 124
Commission, and any case filed with respect thereto audit all the accounts, funds and properties of the SSS
shall be heard by the Commission, or any of its in the same manner and as frequently as the
members, or by hearing officers duly authorized by the accounts, funds and properties of the government are
Commission and decided within twenty (20) days after checked and audited under existing laws, and he shall
the submission of the evidence. The filing, have, as far as practicable, the same powers and
determination and settlement of disputes shall be duties as he has with respect to the checking and
governed by the rules and regulations promulgated by auditing of public accounts, funds and properties in
the Commission. general.
"(b) Appeal to Courts. - Any decision of the "(b) The Secretary of Justice shall be the ex-officio
Commission, in the absence of an appeal therefrom as counsel of the SSS. He or his representative shall act
herein provided, shall become final and executory as legal adviser and counsel thereof.
fifteen (15) days after the date of notification, and "SEC. 7. Oaths, Witnesses, and Production of
judicial review thereof shall be permitted only after any Records. - When authorized by the Commission, an
party claiming to be aggrieved thereby has exhausted official or employee thereof shall have the power to
his remedies before the Commission. The Commission administer oath and affirmation, take depositions,
shall be deemed to be a party to any judicial action certify to official acts, and issue subpoena and
involving any such decision, and may be represented subpoena duces tecum to compel the attendance of
by an attorney employed by the Commission, or when witnesses and the production of books, papers,
requested by the Commission, by the Solicitor General correspondence and other records deemed necessary
or any public prosecutors. as evidence in connection with any question arising
"(c) Court Review. - The decision of the Commission under this Act. Any case of contumacy shall be dealt
upon any disputed matter may be reviewed both upon with by the Commission in accordance with law.
the law and the facts by the Court of Appeals. For the "SEC. 8. Terms Defined. - For purposes of this Act, the
purpose of such review, the procedure concerning following terms shall, unless the context indicates
appeals from the Regional Trial Court shall be followed otherwise, have the following meanings:
as far as practicable and consistent with the purposes
of this Act. Appeal from a decision of the Commission "(a) SSS - The Social Security System created by this
must be taken within fifteen (15) days from notification Act.
of such decision. If the decision of the Commission "(b) Commission - The Social Security Commission as
involves only questions of law, the same shall be herein created.
reviewed by the Supreme Court. No appeal bond shall
be required. The case shall be heard in a summary "(c) Employer- Any person, natural or juridical,
manner, and shall take precedence over all cases, domestic or foreign, who carries on in the Philippines
except that in the Supreme Court, criminal cases any trade, business, industry, undertaking, or activity
wherein life imprisonment or death has been imposed of any kind and uses the services of another person
by the trial court shall take precedence. No appeal who is under his orders as regards the employment,
shall act as a supersedeas or a stay of the order of the except the Government and any of its political
Commission unless the Commission itself, or the Court subdivisions, branches or instrumentalities, including
of Appeals or the Supreme Court, shall so order. corporations owned or controlled by the Government:
Provided, That a self-employed person shall be both
"(d) Execution of Decisions. - The Commission may, employee and employer at the same time.
motu proprio or on motion of any interested party,
issue a writ of execution to enforce any of its decisions "(d) Employee - Any person who performs services for
or awards, after it has become final and executory, in an employer in which either or both mental or physical
the same manner as the decision of the Regional Trial efforts are used and who receives compensation for
Court by directing the city or provincial sheriff or the such services, where there is an employer-employee
sheriff whom it may appoint to enforce such final relationship: Provided, That a self-employed person
decision or execute such writ; and any person who shall be both employee and employer at the same
shall fail or refuse to comply with such decision, award time.
or writ, after being required to do so shall, upon "(e) Dependents - The dependents shall be the
application by the Commission pursuant to Rule 71 of following:
the Rules of Court, be punished for contempt.
"(1) The legal spouse entitled by law to receive support
"SEC. 6. Auditor and Counsel. - (a) The Chairman of from the member;
the Commission on Audit shall be the ex-officio Auditor
of the SSS. He or his representative shall check and "(2) The legitimate, legitimated or legally adopted, and
illegitimate child who is unmarried, not gainfully
Page 111 of 124
employed, and has not reached twenty-one (21) years "(5) Such other services performed by temporary and
of age, or if over twenty-one (21) years of age, he is other employees which may be excluded by regulation
congenitally or while still a minor has been of the Commission. Employees of bona fide
permanently incapacitated and incapable of self- independent contractors shall not be deemed
support, physically or mentally; and employees of the employer engaging the service of
said contractors.
"(3) The parent who is receiving regular support from
the member. "(k) Beneficiaries - The dependent spouse until he or
she remarries, the dependent legitimate, legitimated or
"(f) Compensation - All actual remuneration for
legally adopted, and illegitimate children, who shall be
employment, including the mandated cost-of-living
the primary beneficiaries of the member: Provided,
allowance, as well as the cash value of any
That the dependent illegitimate children shall be
remuneration paid in any medium other than cash
entitled to fifty percent (50%) of the share of the
except that part of the remuneration in excess of the
legitimate, legitimated or legally adopted children:
maximum salary credit as provided under Section
Provided, further, That in the absence of the
Eighteen of this Act.
dependent legitimate, legitimated children of the
"(g) Monthly salary credit - The compensation base for member, his/her dependent illegitimate children shall
contributions and benefits as indicated in the schedule be entitled to one hundred percent (100%) of the
in Section Eighteen of this Act. benefits. In their absence, the dependent parents who
"(h) Monthly - The period from one end of the last shall be the secondary beneficiaries of the member. In
payroll period of the preceding month to the end of the the absence of all the foregoing, any other person
last payroll period of the current month if designated by the member as his/her secondary
compensation is on hourly, daily or weekly basis; if on beneficiary.
any other basis, monthly shall mean a period of one "(l) Contingency - The retirement, death, disability,
(1) month. injury or sickness and maternity of the member.
"(i) Contribution - The amount paid to the SSS by and "(m) Average monthly salary credit - The result
on behalf of the members in accordance with Section obtained by dividing the sum of the last sixty (60)
Eighteen of this Act. monthly salary credits immediately preceding the
"(j) Employment - Any service performed by an semester of contingency by sixty (60), or the result
employee for his employer except: obtained by dividing the sum of all the monthly salary
credits paid prior to the semester of contingency by the
"(1) Employment purely casual and not for the purpose number of monthly contributions paid in the same
of occupation or business of the employer; period, whichever is greater: Provided, That the injury
"(2) Service performed on or in connection with an or sickness which caused the disability shall be
alien vessel by an employee if he is employed when deemed as the permanent disability for the purpose of
such vessel is outside the Philippines; computing the average monthly salary credit.
"(3) Service performed in the employ of the Philippine "(n) Average daily salary credit- The result obtained by
Government or instrumentality or agency thereof; dividing the sum of the six (6) highest monthly salary
credits in the twelve-month period immediately
"(4) Service performed in the employ of a foreign preceding the semester of contingency by one
government or international organization, or their hundred eighty (180).
wholly-owned instrumentality: Provided, however, That
this exemption notwithstanding, any foreign "(o) Semester - A period of two (2) consecutive
government, international organization or their wholly- quarters ending in the quarter of contingency.
owned instrumentality employing workers in the "(p) Quarter - A period of three (3) consecutive
Philippines or employing Filipinos outside of the calendar months ending on the last day of March,
Philippines, may enter into an agreement with the June, September and December.
Philippine Government for the inclusion of such
employees in the SSS except those already covered "(q) Credited years of service - For a member covered
by their respective civil service retirement systems: prior to January nineteen hundred and eighty five
Provided, further, That the terms of such agreement (1985) minus the calendar year of coverage plus the
shall conform with the provisions of this Act on number of calendar years in which six (6) or more
coverage and amount of payment of contributions and contributions have been paid from January nineteen
benefits: Provided, finally, That the provisions of this hundred and eighty five (1985) up to the calendar year
Act shall be supplementary to any such agreement; containing the semester prior to the contingency. For a
and member covered in or after January nineteen hundred
Page 112 of 124
and eighty five (1985), the number of calendar years in the right of employers and employees to agree on and
which six (6) or more contributions have been paid adopt benefits which are over and above those
from the year of coverage up to the calendar year provided under this Act.
containing the semester prior to the contingency: "(b) Spouses who devote full time to managing the
Provided, That the Commission may provide for a household and family affairs, unless they are also
different number of contributions in a calendar year for engaged in other vocation or employment which is
it to be considered as a credited year of service. subject to mandatory coverage, may be covered by
"(r) Member - The worker who is covered under the SSS on a voluntary basis.
Section Nine and Section Nine-A of this Act. "(c) Filipinos recruited by foreign-based employers for
"(s) Self-employed - Any person whose income is not employment abroad may be covered by the SSS on a
derived from employment, as defined under this Act, voluntary basis.
as well as those workers enumerated in Section Nine- "SEC. 9-A. Compulsory Coverage of the Self-
A hereof. Employed. - Coverage in the SSS shall also be
"(t) Net earnings - Net income before income taxes compulsory upon such self-employed persons as may
plus non-cash charges such as depreciation and be determined by the Commission under such rules
depletion appearing in the regular financial statement and regulations as it may prescribe, including but not
of the issuing or assuming institution. limited to the following:
"(u) Fixed charges - Recurring expense such as "1. All self-employed professionals;
amortization of debt discount or rentals for leased "2. Partners and single proprietors of businesses;
properties, including interest on funded and unfunded
debt. "3. Actors and actresses, directors, scriptwriters and
news correspondents who do not fall within the
"SEC. 9. Coverage. - (a) Coverage in the SSS shall be definition of the term "employee" in Section 8 (d) of
compulsory upon all employees not over sixty (60) this Act;
years of age and their employers: Provided, That in
the case of domestic helpers, their monthly income "4. Professional athletes, coaches, trainers and
shall not be less than One thousand pesos jockeys; and
(P1,000.00) a month: Provided, further, That any "5. Individual farmers and fishermen.
benefit already earned by the employees under private
benefit plans existing at the time of the approval of this "Unless otherwise specified herein, all provisions of
Act shall not be discontinued, reduced or otherwise this Act applicable to covered employees shall also be
impaired: Provided, further, That private plans which applicable to the covered self-employed persons.
are existing and in force at the time of compulsory "SEC. 10. Effective Date of Coverage. - Compulsory
coverage shall be integrated with the plan of the SSS coverage of the employer shall take effect on the first
in such a way where the employers contribution to his day of his operation and that of the employee on the
private plan is more than that required of him in this day of his employment: Provided, That the compulsory
Act, he shall pay to the SSS only the contribution coverage of the self-employed person shall take effect
required of him and he shall continue his contribution upon his registration with the SSS.
to such private plan less his contribution to the SSS so
that the employers total contribution to his benefit plan "SEC. 11. Effect of Separation from Employment. -
and to the SSS shall be the same as his contribution to When an employee under compulsory coverage is
his private benefit plan before the compulsory separated from employment, his employers
coverage: Provided, further, That any changes, contribution on his account and his obligation to pay
adjustments, modifications, eliminations or contributions arising from that employment shall cease
improvements in the benefits to be available under the at the end of the month of separation, but said
remaining private plan, which may be necessary to employee shall be credited with all contributions paid
adopt by reason of the reduced contributions thereto on his behalf and entitled to benefits according to the
as a result of the integration, shall be subject to provisions of this Act. He may, however, continue to
agreements between the employers and employees pay the total contributions to maintain his right to full
concerned: Provided, further, That the private benefit benefit.
plan which the employer shall continue for his "SEC. 11-A. Effect of Interruption of Business or
employees shall remain under the employers Professional Income. - If the self-employed realizes no
management and control unless there is an existing income in any given month, he shall not be required to
agreement to the contrary: Provided, finally, That pay contributions for that month. He may, however, be
nothing in this Act shall be construed as a limitation on allowed to continue paying contributions under the
Page 113 of 124
same rules and regulations applicable to a separated separated from employment and is not continuing
employee member: Provided, That no retroactive payment of contributions to the SSS on his own.
payment of contributions shall be allowed other than "(c) The monthly pension shall be suspended upon the
as prescribed under Section Twenty-two-A hereof. reemployment or resumption of self-employment of a
"SEC. 12. Monthly Pension. - (a) The monthly pension retired member who is less than sixty-five (65) years
shall be the highest of the following amounts: old. He shall again be subject to Section Eighteen and
his employer to Section Nineteen of this Act.
"(1) The sum of the following:
"(d) Upon the death of the retired member, his primary
"(i) Three hundred pesos (P300.00; plus
beneficiaries as of the date of his retirement shall be
"(ii) Twenty percent (20%) of the average monthly entitled to receive the monthly pension: Provided, That
salary credit; plus if he has no primary beneficiaries and he dies within
"(iii) Two percent (2%) of the average monthly salary sixty (60) months from the start of his monthly pension,
credit for each credited year of service in excess of ten his secondary beneficiaries shall be entitled to a lump
(10) years; or sum benefit equivalent to the total monthly pensions
corresponding to the balance of the five-year
"(2) Forth percent (40%) of the average monthly salary guaranteed period, excluding the dependents
credit; or pension.
"(3) One thousand pesos (P1,000.00): Provided, That "(e) The monthly pension of a member who retires
the monthly pension shall in no case be paid for an after reaching age sixty (60) shall be the higher of
aggregate amount of less than sixty (60) months. either: (1) the monthly pension computed at the
"(b) Notwithstanding the preceding paragraph, the earliest time he could have retired had he been
minimum pension shall be One thousand two hundred separated from employment or ceased to be self-
pesos (P1,200.00) for members with at least ten (10) employed plus all adjustments thereto; or (2) the
credited years of service and Two thousand four monthly pension computed at the time when he
hundred pesos (P2,400.00) for those with twenty (20) actually retires.
credited years of service. "SEC. 13. Death Benefits. - Upon the death of a
"SEC. 12-A. Dependents Pension. - Where monthly member who has paid at least thirty-six (36) monthly
pension is payable on account of death, permanent contributions prior to the semester of death, his
total disability or retirement, dependents pension primary beneficiaries shall be entitled to the monthly
equivalent to ten percent (10%) of the monthly pension pension: Provided, That if he has no primary
or Two hundred fifty pesos (P250.00), whichever is beneficiaries, his secondary beneficiaries shall be
higher, shall also be paid for each dependent child entitled to a lump sum benefit equivalent to thirty-six
conceived on or before the date of the contingency but (36) times the monthly pension. If he has not paid the
not exceeding five (5), beginning with the youngest required thirty-six (36) monthly contributions, his
and without substitution: Provided, That where there primary or secondary beneficiaries shall be entitled to
are legitimate or illegitimate children, the former shall a lump sum benefit equivalent to the monthly pension
be preferred. times the number of monthly contributions paid to the
SSS or twelve (12) times the monthly pension,
SEC. 12-B. Retirement Benefits. - (a) A member who whichever is higher.
has paid at least one hundred twenty (120) monthly
contributions prior to the semester of retirement and "SEC. 13-A. Permanent Disability Benefits. - (a) Upon
who: (1) has reached the age of sixty (60) years and is the permanent total disability of a member who has
already separated from employment or has ceased to paid at least thirty-six (36) monthly contributions prior
be self-employed; or (2) has reached the age of sixty- to the semester of disability, he shall be entitled to the
five (65) years, shall be entitled for as long as he lives monthly pension: Provided, That if he has not paid the
to the monthly pension: Provided, That he shall have required thirty-six (36) monthly contributions, he shall
the option to receive his first eighteen (18) monthly be entitled to a lump sum benefit equivalent to the
pensions in lump sum discounted at a preferential rate monthly pension times the number of monthly
of interest to be determined by the SSS. contributions paid to the SSS or twelve (12) times the
monthly pension, whichever is higher. A member who
"(b) A covered member who is sixty (60) years old at (1) has received a lump sum benefit; and (2) is
retirement and who does not qualify for pension reemployed or has resumed self-employment not
benefits under paragraph (a) above, shall be entitled to earlier than one (1) year from the date of his disability
a lump sum benefit equal to the total contributions paid shall again be subject to compulsory coverage and
by him and on his behalf: Provided, That he is shall be considered a new member.
Page 114 of 124
"(b) The monthly pension and dependents pension One ear 10

shall be suspended upon the reemployment or Both ears 20
resumption of self-employment or the recovery of the Hearing of one ear 10
disabled member from his permanent total disability or Hearing of both ears 50
his failure to present himself for examination at least Sight of one eye 25
once a year upon notice by the SSS. "(g) The percentage degree of disability which is
"(c) Upon the death of the permanent total disability equivalent to the ratio that the designated number of
pensioner, his primary beneficiaries as of the date of months of compensability bears to seventy-five (75),
disability shall be entitled to receive the monthly rounded to the next higher integer, shall not be
pension: Provided, That if he has no primary additive for distinct, separate and unrelated permanent
beneficiaries and he dies within sixty (60) months from partial disabilities, but shall be additive for deteriorating
the start of his monthly pension, his secondary and related permanent partial disabilities to a
beneficiaries shall be entitled to a lump sum benefit maximum of one hundred percent (100%), in which
equivalent to the total monthly pensions corresponding case, the member shall be deemed as permanently
to the balance of the five-year guaranteed period totally disabled.
excluding the dependents pension. "(h) In case of permanent partial disability, the monthly
"(d) The following disabilities shall be deemed pension benefit shall be given in lump sum if it is
permanent total: payable for less than twelve (12) months.
"1. Complete loss of sight of both eyes; "(i) For the purpose of adjudicating retirement, death
and permanent total disability pension benefits,
"2. Loss of two limbs at or above the ankle or wrists;
contributions shall be deemed paid for the months
"3. Permanent complete paralysis of two limbs; during which the member received partial disability
"4. Brain injury resulting to incurable imbecility or pension: Provided, That such contributions shall be
insanity; and based on his last contribution prior to his disability.
"5. Such cases as determined and approved by the "(j) Should a member who is on partial disability
SSS. pension retire or die, his disability pension shall cease
upon his retirement or death.
"(e) If the disability is permanent partial, and such
disability occurs before thirty-six (36) monthly "SEC. 13-B. Funeral Benefit. - A funeral grant
contributions have been paid prior to the semester of equivalent to Twelve thousand pesos (P12,000.00)
disability, the benefit shall be such percentage of the shall be paid, in cash or in kind, to help defray the cost
lump sum benefit described in the preceding of funeral expenses upon the death of a member,
paragraph with due regard to the degree of disability including permanently totally disabled member or
as the Commission may determine. retiree.
"(f) If the disability is permanent total and such "SEC. 14. Sickness Benefit. - (a) A member who has
disability occurs after thirty-six (36) monthly paid at least three (3) monthly contributions in the
contributions have been paid prior to the semester of twelve-month period immediately preceding the
disability, the benefit shall be the monthly pension for semester of sickness or injury and is confined therefor
permanent total disability payable not longer than the for more than three (3) days in a hospital or elsewhere
period designated in the following schedule: with the approval of the SSS, shall, for each day of
compensable confinement or a fraction thereof, be
COMPLETE paid by his employer, or the SSS, if such person is
AND PERMANENT NUMBER OF unemployed or self-employed, a daily sickness benefit
LOSS OF USE OF MONTHS equivalent to ninety percent (90%) of his average daily
One thumb 10 salary credit, subject to the following conditions:
One index finger 8 "(1) In no case shall the daily sickness benefit be paid
One middle finger 6 longer than one hundred twenty (120) days in one (1)
One ring finger 5 calendar year, nor shall any unused portion of the one
One little finger 3 hundred twenty (120) days of sickness benefit granted
One big toe 6 under this section be carried forward and added to the
One hand 39 total number of compensable days allowable in the
One arm 50 subsequent year;
One foot 31
One leg 46
Page 115 of 124
"(2) The daily sickness benefit shall not be paid for denial of the claim, such employer shall have no right
more than two hundred forty (240) days on account of to recover the corresponding daily allowance he
the same confinement; and advanced to the employee member as required in this
section.
"(3) The employee member shall notify his employer of
the fact of his sickness or injury within five (5) calendar "(e)The claim of reimbursement shall be adjudicated
days after the start of his confinement unless such by the SSS within a period of two (2) months from
confinement is in a hospital or the employee became receipt thereof: Provided, That should no payment be
sick or was injured while working or within the received by the employer within one (1) month after
premises of the employer in which case, notification to the period prescribed herein for adjudication, the
the employer is necessary: Provided, That if the reimbursement shall thereafter earn simple interest of
member is unemployed or self-employed, he shall one percent (1%) per month until paid.
directly notify the SSS of his confinement within five "(f) The provisions regarding the notification required
(5) calendar days after the start thereof unless such of the member and the employer as well as the period
confinement is in a hospital in which case notification within which the claim for benefit or reimbursement
is also not necessary: Provided, further, That in cases may be filed shall apply to all claims filed with the SSS.
where notification is necessary, the confinement shall
be deemed to have started not earlier than the fifth day "SEC. 14-A. Maternity Leave Benefit. - A female
immediately preceding the date of notification. member who has paid at least three (3) monthly
contributions in the twelve-month period immediately
"(b) The compensable confinement shall begin on the preceding the semester of her childbirth or miscarriage
first day of sickness, and the payment of such shall be paid a daily maternity benefit equivalent to
allowances shall be promptly made by the employer one hundred percent (100%) of her average daily
every regular payday or on the fifteenth and last day of salary credit for sixty (60) days or seventy-eight (78)
each month, and similarly in the case of direct days in case of caesarian delivery, subject to the
payment by the SSS, for as long as such allowances following conditions:
are due and payable: Provided, That such allowance
shall begin only after all sick leaves of absence with "(a) That the employee shall have notified her
full pay to the credit of the employee member shall employer of her pregnancy and the probable date of
have been exhausted. her childbirth, which notice shall be transmitted to the
SSS in accordance with the rules and regulations it
"(c) One hundred percent (100%) of the daily benefits may provide;
provided in the preceding paragraph shall be
reimbursed by the SSS to said employer upon receipt "(b) The full payment shall be advanced by the
of satisfactory proof of such payment and legality employer within thirty (30) days from the filing of the
thereof: Provided, That the employer has notified the maternity leave application;
SSS of the confinement within five (5) calendar days "(c) That payment of daily maternity benefits shall be a
after receipt of the notification from the employee bar to the recovery of sickness benefits provided by
member: Provided, further, That if the notification to this Act for the same period for which daily maternity
the SSS is made by the employer beyond five (5) benefits have been received;
calendar days after receipt of the notification from the
employee member, said employer shall be reimbursed "(d) That the maternity benefits provided under this
only for each day of confinement starting from the section shall be paid only for the first four (4) deliveries
tenth calendar day immediately preceding the date of or miscarriages;
notification to the SSS: Provided, finally, That the SSS "(e) That the SSS shall immediately reimburse the
shall reimburse the employer or pay the unemployed employer of one hundred percent (100%) of the
member only for confinement within the one-year amount of maternity benefits advanced to the
period immediately preceding the date the claim for employee by the employer upon receipt of satisfactory
benefit or reimbursement is received by the SSS, proof of such payment and legality thereof; and
except confinement in a hospital in which case the
claim for benefit or reimbursement must be filed within "(f) That if an employee member should give birth or
one (1) year from the last day of confinement. suffer miscarriage without the required contributions
having been remitted for her by her employer to the
"(d) Where the employee member has given the SSS, or without the latter having been previously
required notification but the employer fails to notify the notified by the employer of the time of the pregnancy,
SSS of the confinement or to file the claim for the employer shall pay to the SSS damages equivalent
reimbursement within the period prescribed in this to the benefits which said employee member would
section resulting in the reduction of the benefit or otherwise have been entitled to.
Page 116 of 124
"SEC. 15. Non-Transferability of Benefits. - The SSS by Sec. 9, P. D. No. 24, S. 1972; and Sec. 14, P. D.
shall promptly pay the benefits provided in this Act to No. 735, S. 1975).
such persons as may be entitled thereto in accordance "SEC. 17. Fee of Agents, Attorneys, Etc. - No agent,
with the provisions of this Act: Provided, That the SSS attorney or other person in charge of the preparation,
shall pay the retirement benefits on the day of filing or pursuing any claim for benefit under this Act
contingency to qualified members who have submitted shall demand or charge for his services any fee, and
the necessary documents at least six (6) months any stipulation to the contrary shall be null and void.
before: Provided, further, That the beneficiary who is a The retention or deduction of any amount from any
national of a foreign country which does not extend benefit granted under this Act for the payment of fees
benefits to a Filipino beneficiary residing in the for such services is prohibited: Provided, however,
Philippines, or which is not recognized by the That any member of the Philippine Bar who appears
Philippines, shall not be entitled to receive any benefit as counsel in any case heard by the Commission shall
under this Act: Provided, further, That notwithstanding be entitled to attorneys fees not exceeding ten percent
the foregoing, where the best interest of the SSS will (10%) of the benefits awarded by the Commission,
be served, the Commission may direct payments which fees shall not be payable before the actual
without regard to nationality or country of residence: payment of the benefits, and any stipulation to the
Provided, further, That if the recipient is a minor or a contrary shall be null and void.
person incapable of administering his own affairs, the
Commission shall appoint a representative under such "Any violation of the provisions of this Section shall be
terms and conditions as it may deem proper: punished by a fine of not less than Five hundred pesos
Provided, further, That such appointment shall not be (P500.00) nor more than Five thousand pesos
necessary in case the recipient is under the custody of (P5,000.00), or imprisonment for not less than six (6)
or living with the parents or spouse of the member in months nor more than one (1) year, or both, at the
which case the benefits shall be paid to such parents discretion of the court.
or spouse, as representative payee of the recipient. "SEC. 18. Employees Contributions. - (a) Beginning
Such benefits are not transferable and no power of as of the last day of the calendar month when an
attorney or other document executed by those entitled employees compulsory coverage takes effect and
thereto in favor of any agent, attorney or any other every month thereafter during his employment, the
person for the collection thereof on their behalf shall employer shall deduct and withhold from such
be recognized, except when they are physically unable employees monthly salary, wage, compensation or
to collect personally such benefits: Provided, further, earnings, the employees contribution in an amount
That in case of death benefits, if no beneficiary corresponding to his salary, wage, compensation or
qualifies under this Act, said benefits shall be paid to earnings during the month in accordance with the
the legal heirs in accordance with the law of following schedule:
succession.
SALARY RANGE OF MONTHLY
"SEC. 16. Exemption from Tax, Legal Process and MONTHLY CONTRIBUTION
Lien. -- All laws to the contrary notwithstanding, the BRACKET COMPENSATION SALARY
SSS and all its assets and properties, all contributions CREDIT
collected and all accruals thereto and income or EMPLOYER EMPLOYEE TOTAL
investment earnings therefrom as well as all supplies,
equipment, papers or documents shall be exempt from I 1,000.00 - 1,249.99
any tax, assessment, fee, charge, or customs or 1000 50.70 33.30 84.00
import duty; and all benefit payments made by the II 1,250.00 - 1,749.99
SSS shall likewise be exempt from all kinds of taxes, 1500 76.00 50.00 126.00
fees or charges, and shall not liable to attachments, III 1,750.00 - 2,249.99 2000
garnishments, levy or seizure by or under any legal or 101.30 66.70 168.00
equitable process whatsoever, either before or after IV 2,250.00 - 2,749.99 2500
receipt by the person or persons entitled thereto, 126.70 83.30 210.00
except to pay any debt of the member to the SSS. No V 2,750.00 - 3,249.99 3000
tax measure of whatever nature enacted shall apply to 152.00 100.00 252.00
the SSS, unless it expressly revokes the declared VI 3,250.00 - 3,749.99 3500
policy of the State in Section 2 hereof granting tax- 177.30 116.70 294.00
exemption to the SSS. Any tax assessment imposed VII 3,750.00 - 4,249.99 4000
against the SSS shall be null and void. (As amended 202.70 133.30 336.00
VIII 4,250.00 - 4,749.99 4500
228.00 150.00 378.00
Page 117 of 124
IX 4,750.00 - 5,249.99 5000 employed member shall be determined in accordance

253.30 166.70 420.00 with Section Eighteen of this Act: Provided, That the
X 5,250.00 - 5,749.99 5500 monthly earnings declared by the self-employed
278.70 183.70 462.40 member at the time of his registration with the SSS
XI 5,750.00 - 6,249.99 6000 shall be considered as his monthly compensation and
304.00 200.00 504.00 he shall pay both the employer and the employee
XII 6,250.00 - 6,749.99 6500 contributions: Provided, further, That the contributions
329.30 216.78 546.00 of self-employed persons earning One thousand pesos
XIII 6,750.00 - 7,249.99 7000 (P1,000.00) monthly or below may be reduced by the
354.70 233.30 588.00 Commission.
XIV 7,250.00 - 7,749.99 7500 "The monthly earnings declared by the self-employed
380.00 250.00 630.00 member at the time of his registration shall remain the
XV 7,750.00 - 8.249.99 8000 basis of his monthly salary credit, unless he makes
403.30 266.70 672.00 another declaration of his monthly earnings, in which
XVI 8,250.00 - 8,749.99 8500 case such latest declaration becomes the new basis of
430.70 283.30 714.00 his monthly salary credit.
XVII 8,750.00 - OVER 9000
456.00 300.00 756.00 "SEC. 20. Government Contribution. - As the
contribution of the Government to the operation of the
"The foregoing schedule of contribution shall also SSS, Congress shall annually appropriate out of any
apply to self-employed and voluntary members. funds in the National Treasury not otherwise
"The maximum monthly salary credit shall be Nine appropriated, the necessary sum or sums to meet the
thousand pesos (P9,000.00) effective January estimated expenses of the SSS for each ensuing year.
Nineteen hundred and ninety six (1996); Provided, In addition to this contribution, Congress shall
That it shall be increased by One thousand pesos appropriate from time to time such sum or sums as
(P1,000.00) every year thereafter until it shall have may be needed to assure the maintenance of an
reached Twelve thousand pesos (P12,000.00) by adequate working balance of the funds of the SSS as
Nineteen hundred and ninety nine (1999): Provided, disclosed by suitable periodic actuarial studies to be
further, That the minimum and maximum monthly made of the operations of the SSS.
salary credits as well as the rate of contributions may "SEC. 21. Government Guarantee. -- The benefits
be fixed from time to time by the Commission through prescribed in this Act shall not be diminished and to
rules and regulations taking into consideration guarantee said benefits the Government of the
actuarial calculations and rate of benefits, subject to Republic of the Philippines accepts general
the approval of the President of the Philippines. responsibility for the solvency of the SSS.
"SEC. 19. Employers Contributions. - (a) Beginning as "SEC. 22. Remittance of Contributions. -- (a) The
of the last day of the month when an employees contributions imposed in the preceding Section shall
compulsory coverage takes effect and every month be remitted to the SSS within the first ten (10) days of
thereafter during his employment, his employer shall each calendar month following the month for which
pay, with respect to such covered employee, the they are applicable or within such time as the
employers contribution in accordance with the Commission may prescribe. Every employer required
schedule indicated in Section Eighteen of this Act. to deduct and to remit such contributions shall be
Notwithstanding any contract to the contrary, an liable for their payment and if any contribution is not
employer shall not deduct, directly or indirectly, from paid to the SSS as herein prescribed, he shall pay
the compensation of his employees covered by the besides the contribution a penalty thereon of three
SSS or otherwise recover from them the employers percent (3%) per month from the date the contribution
contributions with respect to such employees. falls due until paid. If deemed expedient and advisable
"(b) The remittance of such contributions by the by the Commission, the collection and remittance of
employer shall be supported by a quarterly collection contributions shall be made quarterly or semi-annually
list to be submitted to the SSS at the end of each in advance, the contributions payable by the
calendar quarter indicating the correct ID number of employees to be advanced by their respective
the employer, the correct names and the SSS employers: Provided, That upon separation of an
numbers of the employees and the total contributions employee, any contribution so paid in advance but not
paid for their account during the quarter. due shall be credited or refunded to his employer.
"SEC. 19-A. Contributions of the Self-Employed "(b) The contributions payable under this Act in cases
Member. - The contributions to the SSS of the self- where an employer refuses or neglects to pay the
Page 118 of 124
same shall be collected by the SSS in the same names, ages, civil status, occupations, salaries and
manner as taxes are made collectible under the dependents of all his employees who are subject to
National Internal Revenue Code, as amended. Failure compulsory coverage: Provided, That if an employee
or refusal of the employer to pay or remit the subject to compulsory coverage should die or become
contributions herein prescribed shall not prejudice the sick or disabled or reach the age of sixty (60) without
right of the covered employee to the benefits of the the SSS having previously received any report or
coverage. written communication about him from his employer,
the said employer shall pay to the SSS damages
"The right to institute the necessary action against the
equivalent to the benefits to which said employee
employer may be commenced within twenty (20) years
member would have been entitled had his name been
from the time the delinquency is known or the
reported on time by the employer to the SSS, except
assessment is made by the SSS, or from the time the
that in case of pension benefits, the employer shall be
benefit accrues, as the case may be.
liable to pay the SSS damages equivalent to the
"(c) Should any person, natural or juridical, default in accumulated pension due as of the date of settlement
any payment of contributions, the Commission may of the claim or to the five (5) years pension, including
also collect the same in either of the following ways: dependents pension: Provided, further, That if the
"1. By an action in court, which shall hear and dispose contingency occurs within thirty (30) days from the
of the case in preference to any other civil action; or date of employment, the employer shall be relieved of
his liability for damages: Provided, further, That any
"2. By issuing a warrant to the Sheriff of any province person or entity engaging the services of an
or city commanding him to levy upon and sell any real independent contractor shall be subsidiarily liable with
and personal property of the debtor. The Sheriffs sale such contractor for any civil liability incurred by the
by virtue of said warrant shall be governed by the latter under this Act: Provided, finally, That the same
same procedure prescribed for executions against person or entity engaging the services of an
property upon judgments by a court of record. independent contractor shall require such contractor to
"(d) The last complete record of monthly contributions post a surety bond to guarantee the payment of the
paid by the employer or the average of the monthly workers benefits.
contributions paid during the past three (3) years as of "(b) Should the employer misrepresent the true date of
the date of filing of the action for collection shall be employment of the employee member or remit to the
presumed to be the monthly contributions payable by SSS contributions which are less than those required
and due from the employer to the SSS for each of the in this Act or fail to remit any contribution due prior to
unpaid month, unless contradicted and overcome by the date of contingency, resulting in a reduction of
other evidence: Provided, That the SSS shall not be benefits, the employer shall pay to the SSS damages
barred from determining and collecting the true and equivalent to the difference between the amount of
correct contributions due the SSS even after full benefit to which the employee member or his
payment pursuant to this paragraph, nor shall the beneficiary is entitled had the proper contributions
employer be relieved of his liability under Section been remitted to the SSS and the amount payable on
Twenty-eight of this Act. the basis of contributions actually remitted: Provided,
"SEC. 22-A. Remittance of Contributions of Self- That if the employee member or his beneficiary is
Employed Member. - Self-employed members shall entitled to pension benefits, damages shall be
remit their monthly contributions quarterly on such equivalent to the accumulated pension due as of the
dates and schedules as the Commission may specify date of settlement of the claim or to the five (5) years
through rules and regulations: Provided, That no pension, whichever is higher, including dependents
retroactive payment of contributions shall be allowed, pension.
except as provided in this Section. "In addition to the liability mentioned in the preceding
"SEC. 23. Method of Collection and Payment. - The paragraphs (a) and (b) hereof, the employer shall also
SSS shall require a complete and proper collection be liable for the corresponding unremitted
and payment of contributions and proper identification contributions and penalties thereon.
of the employer and the employee. Payment may be "(c) The records and reports duly accomplished and
made in cash, checks, stamps, coupons, tickets, or submitted to the SSS by the employer or the member,
other reasonable devices that the Commission may as the case may be, shall be kept confidential by the
adopt. SSS except in compliance with a subpoena duces
"SEC. 24. Employment Records and Reports. - (a) tecum issued by the Court, shall not be divulged
Each employer shall immediately report to the SSS the without the consent of the SSS President or any
official of the SSS duly authorized by him, shall be
Page 119 of 124
presumed correct as to the data and other matters or clearance shall be issued by the SSS within five (5)
stated therein, unless the necessary corrections to working days from receipt of the request.
such records and reports have been properly made by "SEC. 24-A. Report and Registration of the Self-
the parties concerned before the right to the benefit Employed Member. - Each covered self-employed
being claimed accrues, and shall be made the basis person shall, within thirty (30) days from the first day
for the adjudication of the claim. If as a result of such he started the practice of his profession or business
adjudication the SSS in good faith pays a monthly operations register and report to the SSS his name,
pension to a beneficiary who is inferior in right to age, civil status, and occupation, average monthly net
another beneficiary or with whom another beneficiary income and his dependents.
is entitled to share, such payments shall discharge the
SSS from liability unless and until such other "SEC. 25. Deposits and Disbursements. - All money
beneficiary notifies the SSS of his claim prior to the paid to or collected by the SSS every year under this
payments. Act, and all accruals thereto shall be deposited,
administered and disbursed in the same manner and
"(d) Every employer shall keep true and accurate work under the same conditions and requirements as
records for such period and containing such provided by law for other public special funds:
information as the Commission may prescribe, in Provided, That not more than twelve percent (12%) of
addition to an "Annual Register of New and Separated the total yearly contributions plus three percent (3%) of
Employees" which shall be secured from the SSS other revenues shall be disbursed for operational
wherein the employer shall enter on the first day of expenses such as salaries and wages, supplies and
employment or on the effective date of separation, the materials, depreciation and the maintenance of offices
names of the persons employed or separated from of the SSS: Provided, further, That if the expenses in
employment, their SSS numbers, and such other data any year are less than the maximum amount
that the Commission may require and said annual permissible, the difference shall not be availed of as
register shall be submitted to the SSS in the month of additional expenses in the following years.
January of each year. Such records shall be open for
inspection by the SSS or its authorized representatives "SEC. 26. Investment of Reserve Funds. - All
quarterly or as often as the SSS may require. revenues of the SSS that are not needed to meet the
current administrative and operational expenses
"The SSS may also require each employer to submit, incidental to the carrying out of this Act shall be
with respect to the persons in his employ, reports accumulated in a fund to be known as the "Reserve
needed for the effective administration of this Act. Fund." Such portions of the Reserve Fund as are not
"(e) Each employer shall require, as a condition to needed to meet the current benefit obligations thereof
employment, the presentation of a registration number shall be known as the "Investment Reserve Fund"
secured by the prospective employee from the SSS in which the Commission shall manage and invest with
accordance with such procedure as the SSS may the skill, care, prudence and diligence necessary
adopt: Provided, That in case of employees who have under the circumstances then prevailing that a prudent
been assigned registration numbers by virtue of a man acting in like capacity and familiar with such
previous employment, such numbers originally matters would exercise in the conduct of an enterprise
assigned to them should be used for purposes of this of a like character and with similar aims. Pursuant
Section: Provided, further, That the issuance of such thereto, and in line with the basic principles of safety,
registration numbers by the SSS shall not exempt the good yield and liquidity, the Commission shall invest
employer from complying with the provisions of the funds to earn an annual income not less than the
paragraph (a) of this Section. average rates of treasury bills or any other acceptable
market yield indicator in any or in all of the following:
"(f) Notwithstanding any law to the contrary, microfilm,
or non-erasable optical disk and other similar archival "(a) In bonds, securities, promissory notes or other
media copies of original SSS records and reports, duly evidence of indebtedness of the Government of the
certified by the official custodian thereof, shall have the Philippines, or in bonds, securities, promissory notes
same evidentiary value as the originals and be or other evidence of indebtedness to which the full
admissible as evidence in all legal proceedings. faith, credit and unconditional guarantee of the
Government of the Philippines is pledged;
"(g) Notwithstanding any law to the contrary, local
government units shall, prior to issuing any annual "(b) In bonds, securities, promissory notes or other
business license or permit, require submission of evidence of indebtedness of the Government of the
certificate of SSS coverage and compliance with the Philippines, or any agencies or instrumentalities to
provisions of this Act: Provided, That the certification finance domestic infrastructure projects such as roads,
bridges, ports, telecommunications, and other similar
Page 120 of 124
projects: Provided, That the instruments issued by an equipment and facilities: Provided, That such
agency or instrumentality of the government shall be investments shall not exceed ten percent (10%) of the
guaranteed by the Government of the Philippines or Investment Reserve Fund;
any government financial institution or acceptable "(g) In real estate property, including shares of stocks
multilateral agency: Provided, further, That the SSS involving real estate property, and investment secured
shall have priority over the revenues of the projects: by first mortgages on real estate or other collaterals
Provided, finally, That such investments shall not acceptable to the SSS: Provided, That such projects
exceed thirty percent (30%) of the Investment Reserve and investments shall, in the determination of the
Fund; Commission, redound to the benefit of the SSS, its
"(c) In bonds, securities, promissory notes or other members, as well as the general public: Provided,
evidence of indebtedness of government financial further, That investment in real estate property,
institutions or government corporations with including shares of stocks involving real estate
acceptable credit or guarantee: Provided, That such property shall not exceed five percent (5%) of the
investments shall not exceed thirty percent (30%) of Investment Reserve Fund: Provided, finally, That
the Investment Reserve Fund; investments in other income earning projects and
investments secured by first mortgages or other
"(d) In bonds, securities, promissory notes or other
collaterals shall not exceed twenty five percent (25%)
evidence of indebtedness of any bank doing business
of the Investment Reserve Fund;
in the Philippines and in good standing with the
Bangko Sentral ng Pilipinas to finance loans to private "(h) In bonds, debentures, securities, promissory notes
corporations doing business in the Philippines, or other evidence of indebtedness of any prime
including schools, hospitals, small-and-medium scale corporation or multilateral institutions to finance
industries, cooperatives and non-governmental domestic projects: Provided, That the issuing or
organizations, in which case the collaterals or assuming entity or its predecessors shall not have
securities shall be assigned to the SSS under such defaulted in the payment of interest on any of its
terms and conditions as the Commission may securities and that during each of any three (3)
prescribe: Provided, That in the case of bank deposits, including the last two (2) of the five (5) fiscal years
they shall not exceed at any time the unimpaired next preceding the date of acquisition by the SSS of
capital and surplus or total private deposits of the such bonds, debentures or other evidence of
depository bank, whichever is smaller: Provided, indebtedness, the net earnings of the issuing or
further, That said bank shall first have been designated assuming institution available for its fixed charges, as
as a depository for this purpose by the Monetary defined in this Act, shall have been not less than one
Board of the Bangko Sentral ng Pilipinas: Provided, and one-quarter times the total of its fixed charges for
finally, That such investments shall not exceed forty such year: Provided, further, That such investments
percent (40%) of the Investment Reserve Fund; shall not exceed thirty percent (30%) of the Investment
Reserve Fund;
"(e) In bonds, securities, promissory notes or other
evidence of indebtedness of shelter agencies of the "(i) In preferred or common shares of stocks listed or
National Government or financial intermediaries to about to be listed in the stock exchange or options or
finance housing loans of members; and in long-term warrants to such stocks or, subject to prior approval of
direct individual or group housing loans giving priority the Bangko Sentral ng Pilipinas, such other risk
to the low-income groups, up to a maximum of ninety management instruments of any prime or solvent
percent (90%) of the appraised value of the properties corporation or financial institution created or existing
to be mortgaged by the borrowers; and under the laws of the Philippines with proven track
record of profitability over the last three (3) years and
"In short and medium term loans to members such as
payment of dividends at least once over the same
salary, educational, livelihood, marital, calamity and
period: Provided, That such investments shall not
emergency loans: Provided, That not more than thirty
exceed thirty percent (30%) of the Investment Reserve
five percent (35%) of the Investment Reserve Fund at
Fund;
any time shall be invested for housing purposes:
Provided, further, That not more than ten percent "(j) In domestic or foreign mutual funds in existence for
(10%) of the Investment Reserve Fund shall be at least three (3) years; Provided, That such
invested in short and medium term loans; investments shall not exceed twenty percent (20%) of
the Investment Reserve Fund: Provided, further, That
"(f) In bonds, securities, promissory notes or other
investments in foreign mutual funds shall not exceed
evidence of indebtedness of educational or medical
one percent (1%) of the Investment Reserve Fund in
institutions to finance the construction, improvement
the first year which shall be increased by one percent
and maintenance of schools and hospitals and their
Page 121 of 124
(1%) for each succeeding year, but in no case shall it "SEC. 26-A. Fund Managers. - As part of its
exceed seven and one-half percent (7.5%) of the investment operations, the SSS may appoint local or,
Investment Reserve Fund; in the absence thereof, foreign fund managers to
manage the Investment Reserve Fund, as it may
"(k) In foreign currency deposits or triple "A" foreign
deem appropriate.
currency denominated debts, prime and non-
speculative equities, and other Bangko Sentral ng "SEC. 26-B. Mortgagor Insurance Account. - (a) As
Pilipinas approved financial instruments or other part of its investment operations, the SSS shall act as
assets issued in accordance with the existing laws of insurer of all or part of its interest on SSS properties
the countries where such financial instruments are mortgaged to the SSS, or lives of mortgagors whose
issued: Provided, That these instruments or assets are properties are mortgaged to the SSS. For this
listed in bourses of the respective countries where purpose, the SSS shall establish a separate account to
these instruments or assets are issued: Provided, be known as the "Mortgagors Insurance Account." All
further, That the issuing company has proven track of amounts received by the SSS in connection with the
record of profitability over the last three (3) years and a aforesaid insurance operations shall be placed in the
record of regular dividend pay-out over the same Mortgagors Insurance Account. The assets and
period: Provided, finally, That such investments shall liabilities of the Mortgagors Insurance Account shall at
not exceed one percent (1%) of the Investment all times be clearly identifiable and distinguishable
Reserve Fund in the first year which shall be increased from the assets and liabilities in all other accounts of
by one percent (1%) for each succeeding year, but in the SSS. Notwithstanding any provision of law to the
no case shall it exceed seven and one-half percent contrary, the assets held in the Mortgagors Insurance
(7.5%) of the Investment Reserve Fund; Account shall not be chargeable with the liabilities
arising out of any other business the SSS may conduct
"(l) In loans secured by such collaterals like cash,
but shall be held and applied exclusively for the benefit
government securities or guarantees of multilateral
of the owners or beneficiaries of the insurance
institutions: Provided, That such investments shall not
contracts issued by the SSS under this paragraph.
exceed thirty percent (30%) of the Investment Reserve
Fund; and "(b) The SSS may insure any of its interest or part
thereof with any private company or reinsurer. The
"(m) In other Bangko Sentral ng Pilipinas approved
Insurance Commission or its authorized
investment instruments with the same intrinsic quality
representatives shall make an examination into the
as those enumerated in paragraphs (a) to (l) hereof,
financial condition and methods of transacting
subject to the policies and guidelines which the
business of the SSS at least once in two (2) years, but
Commission may formulate.
such examination shall be limited to the insurance
"No portion of the Investment Reserve Fund or income operation of the SSS as authorized under this
thereof shall accrue to the general fund of the National paragraph and shall not embrace the other operations
Government or to any of its agencies or of the SSS; and the report of said examination shall be
instrumentalities, including government-owned or submitted to the Commission and a copy thereof shall
controlled corporations, except as may be allowed be furnished the Office of the President of the
under this Act: Provided, That no portion of the Philippines within a reasonable time after the close of
Investment Reserve Fund shall be invested for any the examination: Provided, That for each examination,
purpose or in any instrument, institution or industry the SSS shall pay to the Insurance Commission an
over and above the prescribed cumulative ceilings as amount equal to the actual expense of the Insurance
follows: Commission in the conduct of examination, including
40% in private securities the salaries of the examiners and of the actuary of the
Insurance Commission who have been assigned to
35% in housing make such examination for the actual time spent in
30% in real estate related investments said examination: Provided, further, That the general
law on insurance and the rules and regulations
10% in short and medium-term member loans promulgated thereunder shall have suppletory
30% in government financial institutions and application insofar as it is not in conflict with this Act
corporations and its rules and regulations.
30% in infrastructure projects "SEC. 27. Records and Reports. - The SSS President
shall keep and cause to keep records of operations of
15% in any particular industry
the funds of the SSS and of disbursements thereof
7.5% in foreign-currency denominated investments and all accounts of payments made out of said funds.
During the month of January of each year, the SSS
Page 122 of 124
President shall prepare for submission to the President altered, forged, material in imitation of the material
of the Philippines and to Congress of the Philippines a used in the manufacture of such stamp, coupon, ticket,
report of operations of the SSS during the preceding book or other device, shall be fined not less than Five
year, including statistical data on the number of thousand pesos (P5,000.00) non more than Twenty
persons covered and benefited, their occupations and thousand pesos (P20,000.00) or imprisoned for not
employment status, the duration and amount of less than six years (6) and one (1) day nor more than
benefits paid, the finances of the SSS at the close of twelve (12) years, or both, at the discretion of the
the said year, and recommendations. He shall also court.
cause to be published in two (2) newspapers of "(e) Whoever fails or refuses to comply with the
general circulation in the Philippines a synopsis of the provisions of this Act or with the rules and regulations
annual report, showing in particular the status of the promulgated by the Commission, shall be punished by
finances of the SSS and the benefits administered. a fine of not less than Five thousand pesos
"SEC. 28. Penal Clause. - (a) Whoever, for the (P5,000.00) nor more than Twenty thousand pesos
purpose of causing any payment to be made under (P20,000.00), or imprisonment for not less than six (6)
this Act, or under an agreement thereunder, where years and one (1) day nor more than twelve (12)
none is authorized to be paid, shall make or cause to years, or both, at the discretion of the court: Provided,
be made false statement or representation as to any That where the violation consists in failure or refusal to
compensation paid or received or whoever makes or register employees or himself, in case of the covered
causes to be made any false statement of a material self-employed or to deduct contributions from the
fact in any claim for any benefit payable under this Act, employees compensation and remit the same to the
or application for loan with the SSS, or whoever makes SSS, the penalty shall be a fine of not less Five
or causes to be made any false statement, thousand pesos (P5,000.00) nor more than Twenty
representation, affidavit or document in connection thousand pesos (P20,000.00) and imprisonment for
with such claim or loan, shall suffer the penalties not less than six (6) years and one (1) day nor more
provided for in Article One hundred seventy-two of the than twelve (12) years.
Revised Penal Code. "(f) If the act or omission penalized by this Act be
"(b) Whoever shall obtain or receive any money or committed by an association, partnership, corporation
check under this Act or any agreement thereunder, or any other institution, its managing head, directors or
without being entitled thereto with intent to defraud any partners shall be liable for the penalties provided in
member, employer or the SSS, shall be fined not less this Act for the offense.
than Five thousand pesos (P5,000.00) nor more than "(g) Any employee of the SSS who receives or keeps
Twenty thousand pesos (P20,000.00) and imprisoned funds or property belonging, payable or deliverable to
for not less than six (6) years and one (1) day nor the SSS and who shall appropriate the same, or shall
more than twelve (12) years. take or misappropriate, or shall consent, or through
"(c) Whoever buys, sells, offers for sale, uses, abandonment or negligence, shall permit any other
transfers or takes or gives in exchange, or pledges or person to take such property or funds, wholly or
gives in pledge, except as authorized in this Act or in partially, or shall otherwise be guilty of
regulations made pursuant thereto, any stamp, misappropriation of such funds or property, shall suffer
coupon, ticket, book or other device, prescribed the penalties provided in Article Two hundred
pursuant to Section Twenty-three hereof by the seventeen of the Revised Penal Code.
Commission for the collection or payment of "(h) Any employer who, after deducting the monthly
contributions required herein, shall be fined not less contributions or loan amortizations from his
than Five thousand pesos (P5,000.00) nor more than employees compensation, fails to remit the said
Twenty thousand pesos (P20,000.00), or imprisoned deduction to the SSS within thirty (30) days from the
for not less than six (6) years and one (1) day nor date they became due, shall be presumed to have
more than twelve (12) years, or both, at the discretion misappropriated such contributions or loan
of the court. amortizations and shall suffer the penalties provided in
"(d) Whoever, with intent to defraud, alters, forges, Article Three hundred fifteen of the Revised Penal
makes or counterfeits any stamp, coupon, ticket, book Code.
or other device prescribed by the Commission for the "(i) Criminal action arising from a violation of the
collection or payment of any contribution required provisions of this Act may be commenced by the SSS
herein, or uses, sells, lends, or has in his possession or the employee concerned either under this Act or in
any such altered, forged or counterfeited materials, or appropriate cases under the Revised Penal Code:
makes, uses, sells or has in his possession any such Provided, That such criminal action may be filed by the
Page 123 of 124
SSS in the city or municipality where the SSS office is

located, if the violation was committed within its
territorial jurisdiction or in Metro Manila, at the option
of the SSS.
"SEC. 29. Government Aid. - The establishment of the
SSS shall not disqualify the members and employers
from receiving such government assistance, financial
or otherwise, as may be provided.
"SEC. 30. Transitory Clause. - Any employer who is
delinquent or has not remitted all contributions due
and payable to the SSS may, within six (6) months
from the effectivity of this Act, remit said contributions
or submit a proposal to pay the same in installment
within a period of not more than twelve (12) months
from the effectivity of this Act without incurring the
prescribed penalty, subject to the implementing rules
and regulations which the Commission may prescribe:
Provided, That the employer submits the
corresponding collection lists together with the
remittance or proposal to pay in installments:
Provided, further, That in case the employer fails to
remit contributions within the six-month grace period or
defaults in the payment of any amortization provided
the approved proposal, the prescribed penalty shall be
imposed from the time the contributions first became
due as provided in Section 22 (a) hereof."
SEC. 2. Separability Clause. - If any provision of this
Act is declared invalid, the other provisions not
affected thereby shall remain valid.
SEC. 3. Repealing Clause. - All laws, proclamations,
executive orders, rules and regulations or parts thereof
inconsistent with this Act are hereby repealed,
modified or amended accordingly: Provided, That no
person shall be deemed to be vested with any property
or other right by virtue of the enactment or operation of
this Act.
SEC. 4. Effectivity Clause. - This Act shall take effect
fifteen (15) days after its complete publication in the
Official Gazette or in at least two (2) national
newspapers of general circulation whichever comes
earlier.
Approved: May 01, 1997
Page 124 of 124

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D2012 | Labor 1 Finals Reviewer

the said explanation, the company terminated her 2. Coverage

b. Discrimination The policy is a valid exercise of management

e. Discharge on account of pregnancy

employee for having filed a complaint or having employers to their employees.

4. Facilities 5. Special Women Workers

3. Employment of Children (c) The employer shall formulate and implement,

Section 14. Prohibition on the Employment of - fruit picking involving climbing

5. Prohibition against worst forms of child labor

4. Conditions of Employment SECTION 8. Minimum cash wage. The minimum

laws. no case shall physical violence be inflicted upon the

Hours of Work Education

If the househelper leaves without justifiable reason, he

preparation of an article or material output rate or standard minimum rate in appropriate

Omnibus Rules, Book IV, Rule I, Sec. 1

(a) "First-aid treatment" means adequate, immediate

(c) "First-aider" means any person trained and duly

3. Emergency Medical and Dental Services

Art. 157 does NOT require the engagement of full-time

assistance to ensure the adequate and immediate personnel.

Omnibus Rules, Book IV, Rule I

Art. 165. Administration of safety and health laws.

a. The Department of Labor and Employment shall

b. The Secretary of Labor and Employment may,

Omnibus Rules, Book IV, Rule II, Sec 8

Note: Arts. 166-208; repealed by SSS Law of 1997;

III. EMPLOYEE CLASSIFICATION a regular employee.

Art. 278. Coverage. The provisions of this Title shall

PHIL. FEDERATION, ETC. V. NLRC (DECEMBER 11,

respect to the activity in which he is employed and his

(c) An employee who is allowed to work after a

(b) Employment shall be deemed as casual in nature if

Seven cargadores-pahinantes of Coca-Cola

The principal test in determining whether particular

HANJIN draws the workers to be dispatched to its

operation and the unsuitability of raw materials, this

Project employment is coterminous with the merely serves as a badge of regular

2. One Year Service

The proviso in the second paragraph of Article

BRENT SCHOOL v. ZAMORA

1 On October 2, 1995, private respondent Associated

Dumpit-Murillo as a newscaster and co-anchor for

AMA COMPUTER COLLEGE v AUSTRIA PHILIPPINE TOBACCO V. NLRC

Sometime in August 2000, respondent was charged

The employer-employee relationship between Phil

Employee who was hired as a probationary employee

The court upheld the termination as a valid exercise of

On September 14, 1996 (barely four months after

WON Marin was illegally dismissed? NO.

A probationary employee enjoys only temporary

has limited tenure, he still enjoys security of

should acquire tenure. On the other hand, teachers

MAGIS YOUNG ACHIEVERS LEARNNG v.

IV. TERMINATION OF EMPLOYMENT reinstatement.

Art. 277. Miscellaneous provisions.

Employee who was hired as a probationary employee

in fraudulent transaction, misappropriation of

PEPSI COLA v. EV SANTOS

against their employers and repatriated to the

Art. 286. When employment not deemed

c. Fraud or willful breach by the employee of the trust

d. Commission of a crime or offense by the employee

account of the sales of the company one particular authorized representative;