Labor Relations
  F. Ku
Atty.
Labor Relations
Tips for Finals
National Labor Relations
Commission
Procedure
What is the quantum of proof/evidence
required in the adjudication of cases before
the NLRC? Explain your choice.
Substantial evidence.
While it is true that quasi-judicial
bodies like the NLRC are not bound by the
technical rules of procedure in the
adjudication of cases, the evidence
presented before it must at least have a
modicum of admissibility for it to be given
probative value. Not only must there be
some evidence to support a finding or
conclusion, but it must also be substantial
evidence.
Substantial evidence is more than a
mere scintilla. It means such relevant
evidence as a reasonable mind might
accept as adequate to support a conclusion.
It is the basic measure in adjudicating cases
before the NLRC.
Grievance Machinery and
Voluntary Arbitration
What is the purpose of a grievance
machinery?
A grievance machinery is a mechanism
usually embodies in the CBA which
compulsorily subjects all grievances arising
from the implementation or interpretation
of a collective bargaining agreement
and/or the interpretation and enforcement
of company personnel policies.
It is intended to promote friendly dialogue
between labor and management as a means
of maintaining industrial peace. Thus,
before an aggrieved employee may resort
to the courts to enforce his rights under the
CBA, he must first exhaust all remedies
available under the contract which includes
undergoing grievance procedure.
Labor Organization
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
Registration and Cancellation
What is the substitionary doctrine?
The substitionary doctrine provides that the
employees cannot revoke the validly
executed collective bargaining contract
with their employer by the simple
expediency of changing their bargaining
agent. The new agent must respect the
contract.
Coverage
May a non-union member who is a rank-
and-file employee avail of wages increases
provided in the CBA?
Yes, a rank-and-file employee who is not a
member of the union may avail of the wage
increase for they are part of the bargaining
unit even though they may not be part of
the bargaining union. However, the union
may collect an agency fee from the non-
union employee for he has benefited from
the employment conditions negotiated by
the bargaining union. The union then
served as agent of the employees and the
agency fee is a recognition of the agent’s
efforts.
Unfair Labor Practice
What are the four forms of violation of the
duty to bargain?
These are: (a) failure or refusal to meet
and convene; (b) evading the mandatory
subjects of bargaining; (c) bad faith in
bargaining, including failure or refusal to
execute the collective agreement, if
requested and (d) gross violation of the ULP.
Strikes and Lockouts
What are the grounds to strike/lockout?
Strike or lockout may be caused either by a
collective bargaining deadlock or an unfair
labor practice. Violations of CBAs except
flagrant and/or malicious refusal to comply
with its economic provisions, shall not be
considered as ULP and shall not be
strikeable.
What is an illegal strike?
An illegal strike is one which:
1) Contrary to a specific prohibition of
law, such as strike by government
employees;
2) Violates a specific requirement of
law;
Labor Law and social legislation

  F. Ku
3) Declared for an unlawful purpose,
such as inducing the employer to
commit ULP against non-union
employees;
4) Employs unlawful means such as
violence or harassment of
nonstrikers;
5) Is declared in violation of an
existing injunction;
6) Contrary to an existing agreement,
such as a no-strike clause or
conclusive arbitration clause.
What is a strike-on-installment
slowdown?
A strike in installment is a willful reduction
in the rate of work by concerted action of
workers for the purpose of restricting the
output of workers in relation to a labor
dispute. It is strike without complete
stoppage of work but retards production or
limits performance of duties to compel
management to grant their demands.
What are the procedural requirements for a
valid strike?
The strike to be valid must observe the
procedural requirements which are:
(a) filing of a notice of strike
(b) observance of the cooling off
period which is 30 days in case of a
bargaining deadlock or 15 in case of
unfair labor practice. Where there
is union busting however, the union
may take immediate action.
(c) Taking of strike vote; and
(d) Observance of the 7-day strike vote
report period.
Alternative Answer:
Before a valid or legal strike may
take place, the following procedure must
be followed:
(a) a notice of strike must be filed with
the DOLE, particularly the National
Conciliation and Mediation Board;
(b) the cooling-off period must be
observed which is 30 days in case of
bargaining deadlock and 15 days in
case of ULP. If there is union
busting, the union need not observe
the cooling off period and
immediately take a strike vote.
(c) A strike vote will be conducted by
secret balloting, provided that the
NCMB was informed of the voting at
least 24 hours before
(d) Finally, the result of the strike vote
(strike vote report) should be
reported to the NCMB at least 7
days before the intended strike.
This 7-day reporting period is
intended to give DOLE the
opportunity to very whether the
intended strike really carries the
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
Labor Relations
Atty.
imprimatur of the majority of the
union members.
What are illegal acts in a strike?
The following are illegal acts:
1) Acts of violence, coercion,
intimidation, obstruction of ingress
and egress and public thoroughfares
during a strike;
2) Commission of crimes and other
unlawful acts in carrying out the
strike; and
or 3) Violation of any order, prohibition
or injunction of the DOLE Secretary
or NLRC in connection with the
assumption of
jurisdiction/certification Order.
Assumption of jurisdiction/
Certification Order
a) When may the Secretary of Labor
assume jurisdiction over labor
disputes?
b) What is a return-to-work order and
what is its effect?
a) Art. 277(g) of the Labor Code provides
that “when, in his opinion, there exists a
labor dispute causing or likely to cause a
strike, the Secretary of Labor and
Employment may assume jurisdiction over
the dispute and decide it or certify the
same to the Commission for compulsory
arbitration.
b) The Return-to-Work order imposes a
duty to the striking worker to return to his
job so the operations of the company can
be resumed and can continue serving the
public and promoting its interest.
The Return-to-Work order is
immediately executory and failure to
comply with the Order is a ground for ther
loss of employment of the striking workers.
Asia Airlines and its employees cannot
agree on the provisions of the CBA
concerning vacation and sick leave benefits.
Having reached a stalemate, the employees
filed a notice to strike.
a) Is the notice of strike valid? What is
the basis in filing the notice of
strike?
b) The owner of Company A and the
Secretary of Labor are friends. Thus,
the Secretary assumed jurisdiction
of the case. Is the same proper?
c) What is the effect of the issuance
of a return-to-work order? What is
the consequence of the failure on
the part of the employees to report
back to work in compliance with
said order?
Labor Law and social legislation
 Labor Relations
  F. Ku
Atty.
a) Yes, the notice of strike is valid. The law
provides that a strike may be declared in
cases of bargaining deadlocks and unfair
labor practices.
In the instant case, there exists a
bargaining deadlock as Company A and the
employees have reached a stalemate in
negotiations concerning the sick and
vacation leave benefits of the employees
which is considered as part of the economic
provisions of the CBA.
b) Yes, the order of the Secretary is valid.
The Secretary of Labor has the discretion to
assume jurisdiction where a labor dispute
causes or will likely cause a strike/lockout
in an industry which is indispensable to the
national interest.
A strike in Asia Airlines, being a
public transportation company whose
business is imbued with public interest,
requires the assumption of jurisdiction of
the Secretary as the company is engaged in
a vital industry. The fact that the
Secretary’s justification for assuming
jurisdiction may include personal reasons
does not deflect from the fact that the
company is one which is imbued with public
interest and that a prolonged strike would
be inimical to the economy and the
common good.
c) Failure or refusal to comply with a
return-to-work order makes the
continuation of the strike an illegal act,
and thus subjecting the strikers to loss of
employment.
When the Labor Secretary assumes
jurisdiction over a labor dispute in an
industry indispensable to national interest,
such assumption shall have the effect of
automatically enjoining the intending or
impending strike or if the strike is already
ongoing, the assumption automatically
results in a return-to-work order of all
striking orders.
Picketing and other concerned
actions
Does the wearing of armbands constitute
participation in an illegal strike?
No, as provided in the case of Bascon v. CA.
The wearing of armbands to express one’s
views without violating the rights of third
parties are legal per se and constitutionally
protected given that they are not offensive.
The wearing of arm bands to signify union
membership and putting up placards to
express their views cannot be of such great
dimension as to warrant the extreme
penalty of dismissal.
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
Consequences of concerted
actions
For what reasons is it proper to terminate a
union officer in case of a strike? How about
a union member?
The Labor Code provides that a union
officer who knowingly participates in an
illegal strike or knowingly participates in
the commission of illegal acts during a
strike may be declared to have lost his
employment. Thus, a union officer may be
terminated if he participated in an illegal
strike or if he committed prohibited or
illegal acts in a strike, whether legal or not.
A union member however cannot be
terminated for mere participation in a
strike. To warrant a valid termination, the
union member must have committed illegal
acts during the strike.
a) When is there a strike?
b) Under what circumstances does loss
of employment status result?
c) What is good faith strike?
a) The Labor Code defines a strike as a
“temporary stoppage of work by the
concerted action of the employees as a
result of an industrial or labor dispute.” It
has also been defined as a cessation of
work by employees in an effort to get more
favorable terms for themselves, or refusal
to do any work or work at their customary
rate of speed until the object of the strike
is attained.
b) Loss of employment status results when
a union officer knowingly participates in an
illegal strike or when he commits an illegal
act during a strike. In the case of a union
member however, mere participation in the
strike does not warrant loss of employment.
It is only when the union member
committed illegal acts during the strike
that he may be terminated.
c) A “good faith strike” is one constituted
by the union in the honest belief that the
employer is committing or has committed
unfair labor acts at the time the strikers
went on strike even if no such unfair labor
practice has in fact been committed.
Is there a strike - Shaven-head strikers?
Yes. The union’s violation of the Hotel’s
Grooming standards was clearly a
deliberate and concerted action to
undermine the authority of and to
embarrass the hotel. The collaborative
effort to violate the Hotel’s Grooming
Standards forced the hotel to choose
between allowing inappropriately hair style
Labor Law and social legislation
 Labor Relations
  F. Ku
Atty.
employees to continue working, to its
detriment, or to refuse them work, even if
it had to cease operations which, either
way would disrupt the operations.
The act of the Union was not
merely an expression of their grievance but
a calibrated and calculated act designed to
inflict serious damage to the Hotel and its
reputation. (National Union of Workers in
the Hotel Restaurant and Allied Industries –
Dusit Hotel Nikko Chapter v. CA)
Termination of Employment
Security of Tenure
What is security of tenure?
Art. 293 of the Labor Code provides
that “In cases of regular employment, the
employer shall not terminate the services
of an employee except for a just cause or
when authorized by the Labor Code.
An employee who is unjustly
dismissed from work shall be entitled to
reinstatement without loss of seniority
rights and other 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 reinstatement.
Kinds of Employment
Regular Employment
a) What is regular employment?
b) When is a person not considered a
regular employee under the Labor
Code?
c) When can a casual employee
become a regular employee
a) Any agreement to the contrary
notwithstanding, an employment shall be
deemed 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 employer
(Art. 294, LABOR CODE)
b) A person is not deemed a regular
employee if the “employment has been
fixed for a specific project or undertaking
the completion of which has been
determined at the time of the engagement
of the employee or where the work or
services to be performed is seasonal in
nature and the employment is for the
duration of the season. (Art. 294, LABOR
CODE)
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
c) Any employee who has rendered at least
one 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
employment shall continue while such
activity exists. (Art. 294, LABOR CODE)
Probationary employment
a) Who is a probationary employee?
What is the purpose of probationary
employment?
b) When does a probationary
employee become a regular
employee?
a) A probationary employee is one whose
employment does not exceed 6 months
from the date the employee started
working, unless he is covered by an
apprenticeship agreement stipulating a
longer period.
A probationary employee is one
who is on trial by an employer during which
the employer determines whether the or
not he is qualified for permanent
employment.
The purpose of probationary
employment is to afford the employer an
opportunity to observe the fitness of a
probationary employee while at work, and
to ascertain whether he will become a
proper and efficient employee, while the
probationary employee has the chance to
prove to the employer that he has the
qualifications to meet the reasonable
standards for permanent employment.
b) An employee who is allowed to work
after a probationary period shall be
considered a regular employee. (Art. 295,
LABOR CODE)
Fixed-Term Employment
a) Rasul entered into a contract whereby
he agreed that the he shall work for the
employer for 3 years. Is the contract valid?
What kind of employment did he sign up
for?
b) Maria, a high school graduate entered
into a contract whereby she agreed that
she will only work for 4 months to which
she agreed. At the end of 4 months, she
was re-hired and signed another 4-month
contract. Is the contract valid?
c) Was Rasul illegally dismissed? Why or
why not? How about Maria? Why or why not?
Labor Law and social legislation
 Labor Relations
  F. Ku
Atty.
a) Rasul’s contract is valid. This is a case of
a fixed-term contract or a fixed-period
employment which the Supreme Court
upheld to be valid in the case of Brent
School v. Zamora. The Labor Code does not
proscribe or prohibit an employment
contract with a fixed period, provided the
same is entered into by the parties without
any force, duress or improper pressure
being brought to bear upon the employee
and absent any other circumstances
vitiating consent. As long as it satisfactorily
appears that the employer and employee
dealt with each other in more or less equal
terms and the contract was not entered
into to prevent the employee from
acquiring security of tenure, the fixed-term
employment will be upheld.
In the case at bar, there was no
vitiation of consent when Rasual agreed to
enter into the 3-year contract. He was on
more or less equal terms with the employer
when he signed the contract.
b) Maria’s contract is invalid since the same
was merely done to circumvent the law on
her acquiring security of tenure.
The Labor Code is clear that
notwithstanding any written or oral
agreement by the parties, employment
shall be considered regular where the
employee has been engaged to perform
activities usually necessary or desirable in
the usual course of business or trade of the
employer. Indisputably, Maria who is a
saleslady, performs activities usually
necessary or desirable in the usual course
of business or trade of the department
store.
Maria could not be regarded as
having been hired for a specific project or
undertaking for under the Labor Code, this
contemplates an activity which is not
commonly or habitually performed or such
type of work which is not done on a daily
basis but only for a specific duration of
time or until completion. The fact that the
employer repeatedly and continuously hired
workers to do the same kind of work as that
performed by those whose contracts had
expired negates the employer’s contentions
that the workers were hired for a specific
project or undertaking only.
In Purefoods v. NLRC, the Court
held that where from the circumstances it
is apparent that the periods had been
imposed to preclude acquisition of tenurial
security by the employee, they should be
struck down or disregarded as contrary to
public policy and morals.
Clearly, the fixed-term contract
was done to circumvent the right of
employees to security of tenure and is thus
void for being violative of public policy.
c) No, Rasul was not illegally dismissed but
only that his contract has expired. Maria,
on the other hand, being deemed a regular
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
employee, was illegally dismissed when she
was refused employment after the end of
her contract.
Seasonal Employment
a) What is the employment status of a
seasonal employee?
b) Can a seasonal employee become a
regular employee?
a) Seasonal employees are considered
regular employees. Regular seasonal
employees are those called to work from
time to time. The nature of their
relationship with the employer is such that
during off season, they are temporarily laid
off but during a certain season, they are re-
employed or when their services may be
needed. They are not strictly speaking,
separated from service but merely
considered as on leave of absence without
pay until they are re-employed. Their
employment relationship is not severed but
merely suspended.
b) Yes, a seasonal employee can become a
regular employee when the employee does
not merely work for the duration of the
season, but is rehired every working season.
During the time he is not working, he is not
considered terminated but is only deemed
to be on leave without pay. In such a case,
a seasonal worker has the status of a
regular employee.
Just Causes of Dismissal
Ryan, the cashier, failed to account for
P20,000.00. His employer, Jason, placed
him under preventive suspension while
investigating on the act.
a) Was the preventive suspension
valid? What does Ryan’s act
constitute?
b) Can Ryan be validly terminated on
the ground of fraud or breach of
trust?
c) What is the procedure that Jayson
should follow in order to validly
dismiss Ryan?
d) Is an actual hearing required in
order to comply with the
requirements of due process?
a) Yes, for Ryan’s failure to account for the
missing P20,000 is a cause for willful breach
of the trust and confidence reposed in him
by his employer. The preventive suspension
is a valid managerial prerogative as “the
employer may place the worker concerned
under preventive suspension if his
continued employment poses a serious and
Labor Law and social legislation
 Labor Relations
  F. Ku
Atty.
imminent threat to the life or property of
the employer or his co-workers.
Ryan’s suspension is then valid for
he hold a position of trust and confidence,
having access to the money/account of his
employer.
b) Yes. Under the Labor Code, an employer
may terminate an employment on the
ground of fraud or willful breach by the
employee of the trust reposed in him by his
employer. Ryan’s act falls under this just
cause as a ground for termination.
Ryan, being a cashier, is duty
bound to safekeep cash and to exercise due
diligence in handling cash but he failed to
do so. His failure to account for the lost
P20,000 gives reason to doubt Ryan. This is
enough to indicate a willful breach of trust
as to prompt Jason to terminate him.
c) For termination of employment based on
just causes, the following shall be followed:
1) There must be a written notice
served on the employee (Ryan) specifying
the ground or grounds for termination and
giving the employee reasonable opportunity
within which to explain his side; and
2) A hearing or conference during
which the employee concerned, with the
assistance of counsel if he so desires, is
given opportunity to respond to the charge,
present evidence or rebut the evidence
presented against him;
3) a written notice of termination
served on the employee indicating that
upon due consideration of all the
circumstances, grounds have been
established to justify his termination. In
case of termination, the foregoing notices
shall be served on the employee’s last
known address.
d) The law itself only requires “ample
opportunity” to be heard. The essence of
this requirement as an element of due
process in administrative proceedings is the
chance to explain one’s side. In cases of
termination for a just cause, an employee
must be given “ample opportunity to be
heard and to defend himself.”
To be heard does not mean verbal
argumentation inasmuch as one may be
heard just as effectively through written
explanation. Ample opportunity to be heard
may in fact include an actual hearing but it
is not limited to a formal hearing only. The
existence of an actual, formal “trial type”
hearing is not absolutely necessary to
satisfy the employee’s right to be heard.
Juan is a bank teller who failed to account
for P20,000 missing cash. The bank wants
to terminate his employment. Is there a
valid ground to terminate Juan? If yes, on
what ground shall he bet terminated? What
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
is the effect if he was terminated without
notice?
To terminate Juan’s employment, the
following procedure must be followed:
a) a written notice served on Juan
specifying the ground/s for termination and
giving him reasonable opportunity within
which to explain his side;
b) a hearing or conference during which
Juan with the assistance of counsel is given
opportunity to respondent to the charge,
present his evidence or rebut the evidence
presented against him;
c) written notice of termination served on
Juan indicating that upon due consideration
of circumstances, grounds have been
established to justify his termination.
Yes, there is a valid ground to terminate
Juan. He may be terminated for just cause
for fraud or willful breach of the trust
reposed in him by his employer. Being a
bank teller, his job entails the safekeeping
of money in his possession and under his
control. The nature of his work requires
trust and his failure to account for such a
large amount will constitute a willful
breach of the trust reposed in him.
If the employee is terminated with just
cause but without complying with the
requirements of procedural due process, i.e.
twin-notice requirement, the dismissal is
still legal and valid but the employer who
does not observe procedural due process
must pay some indemnity as provided by
the Court in Wenphil v. NLRC.
Johnny, an employee of A company is in
love with Paula. To show his affection, he
courted Paula by sending her flowers,
leaving love notes and other simple
gestures of affection. The company did not
like his actuations and dismissed him from
employment.
a) What are the grounds for a
valid dismissal? Was Johnny’s
dismissal valid?
b) What are the consequences of
Johnny’s dismissal?
a) The dismissal is not valid.
For a dismissal to be valid, it must
be founded on a just or authorized cause.
Just causes for termination of employment
by the employer are as follows:
a) Serious misconduct or willful
disobedience of the lawful
orders of his employers or
representative in connection
with his work;
b) Gross and habitual neglect by
the employee of his duties;
c) Fraud or willful breach by the
employee of the trust reposed
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 Labor Relations
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Atty.
in him by his employer or duly
authorized representative;
d) Commission of a crime or
offense by the employee
against the person of his
employer or any immediate
member of his family or duly
authorized representative; and
e) Other analogous causes.
On the other hand, authorized
causes are as follows:
a) installation of labor-saving devices
b) retrenchment to prevent losses
c) redundancy
d) closure or cessation of business not
due to serious business losses or
financial reverses
e) disease of the employee.
In the instant case, none of these
grounds are present to warrant the
dismissal of Johnny. It cannot be said that
he committed serious misconduct or willful
disobedience for his acts are not in
connection with his work nor is there a
showing that his acts are done with a
wrongful and willful intent.
His acts are mere declarations of
love and absent any harm, should not
warrant the supreme penalty of dismissal.
b) His dismissal being invalid, Johnny is
entitled to reinstatement without loss of
seniority rights and other privileges and to
his full backwages, inclusive of allowances,
and to his other benefits computed from
the time this was withheld from him up to
his actual reinstatement. If reinstatement
is no longer feasible or where a strained
relation between employer and employee
exists, separation pay may be ordered in
lieu of reinstatement.
Juancho, a security guard, had a fight with
the owner of SM Mall. The Security agency
later ordered his transfer to (somewhere
far). Is the transfer valid?
Answer found in Blue Book, not suggested,
but merely guide
No, the transfer order is invalid.
The facts of the case reveal that
the transfer of Juancho was made to
punnish him for confronting the grandson of
SM Mall. Such transfer is attended by bad
faith because it was not made for a valid
reason. Moreover, Juancho refused saying
that it was financially burdensome on his
part, the agency cited him for
insubordination and eventually terminated
him.
The transfer of Juancho is also not
requested by SM. These actuations reveal
the agency’s bad faith. In effect,
Juancho’ss transfer was a constructive
dismissal and hence, it is invalid.
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
In such case, Juancho is on floating
status. When the employer suffers business
losses, he may put his employees on
floating status. If this status continues for
more than six months, Juancho can be
deemed constructively dismissed and he
can file a case of illegal dismissal.
Study points:
While the law recognizes the
managerial prerogative to transfer
personnel, the same must be exercised
without grave abuse of discretion, putting
to mind the elements of justice and fair
play. It should not be exercised as a
subterfuge to rid of an undesirable worker,
or penalize an employee as in this instant
case.
The bona fide suspension of the
operation of a business or undertaking for a
period not exceeding 6 months or the
fulfillment by the employee of a military or
civic duty shall not terminate employment.
In all cases, the employer shall reinstate
the employee to his former position
without loss of seniority rights if he
indicates his desire to resume his work not
later than one month from the resumption
of operations of his employer or from his
relief from military or civic duty.
Uriah was employed as a flight attendant
and signed a contract whereby she agreed
to maintain a certain weight. Uriah
however failed to maintain this weight and
despite repeated demands and continued
encouragement of the employer for her to
do so, she still failed to meet the weight
requirement. She was thus dismissed. Is the
dismissal valid?
Yes, the dismissal is valid.
It should be noted that in the case
of Yrasuegi v. PAL, the Court has upheld
the imposition of a certain weight standard
for the flight attendants to maintain as
reasonable given that weight and size of
the attendant may play a factor in flight
safety, particularly in carrying out his
functions during emergencies. The Court
held that such a weight requirement is only
reasonable as it is done to accomplish a
legitimate work-related purpose.
The same must be applied in the
case at bar. The requirement imposed upon
Uriah to maintain a certain weight is only
reasonable and her failure to comply with
the reasonable standards may be
considered as a just cause for dismissal
under Art. 296(e) or other analogous cases
for dismissal.
Furthermore, Uriaih was informed
prior to her employment of the weight
standards and thus, she is in estoppel and
cannot question the weight limit required
by PAL. Bona fides exigit ut quod convenit
fiat.
Labor Law and social legislation
 Labor Relations
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Atty.
Authorized Causes
Although Joseph’s business is not suffering
any serious business losses, Joseph wants to
close his business already.
a) Can a businessman close his business at
will and not for reason of business losses?
b) What are the obligations of Joseph? How
much separation pay are Joseph’s
employees entitled to considering that the
closure was not due to serious business
losses?
c) If the cessation of business is due to
serious business losses, how much will be
the separation pay of the employees?
d) What is the step or procedure to be
taken by Joseph before the closure of his
business?
a) Yes, Joseph can close his business at will
whether his business is losing or not. If the
business is not losing but its owner, for
reasons of his own, wants to get out of the
business, he in good faith can lawfully do so
anytime. Just as no law forces anyone to go
into business, no law compels anybody to
stay in business. But the employees are
entitled payment of separation pay and
Joseph must still comply with the two-
notice requirement.
b) Joseph is obliged to do the following:
(a) comply with the two-notice
requirement by serving a written
notice on the worker and the DOLE
at least one month before the
intended date of closure; and
(b) pay his employees separation
pay equivalent to at least one
month pay of ½ month pay for
every year of service whichever is
higher. A fraction of 6 months is
considered one year.
c) If the closure is due to serious business
losses, Joseph has no obligation to pay his
employees separation pay since his business
is already losing. In Victor Mendoza v. NLRC,
the Supreme Court held that the “closure
of a business establishment due to serious
losses or financial reverses negates the
grant of separation pay to employees whose
services are terminated. It is only when the
closure is for reasons other than business
reverses or losses that separated personnel
are entitled to separation pay.
Thus, if the closure is due to
serious business losses, then the employees
are not entitled to separation pay.
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
d) Before closure, Joseph must first serve a
written notice on the worker and the DOLE
at least one month before the intended
date of closure.
How much separation pay is the employee
entitled to in termination of employment
by reason of (a) disease; (b) retrenchment;
(c) redundancy and (d) introduction of
labor-saving devices?
Art. 298 of the Labor Code provides
that an employer may terminate the
services of an employee who has been
found to be suffering from any disease and
whose continued employment is prohibited
by law or is prejudicial to his health as well
as to the health of his co-employees,
provided that he is paid separation pay
equivalent to one month salary or one-half
month salary for every year of service,
whichever is higher, provided that a
fraction of 6 months is considered 1 whole
year.
Art. 297 on the other hand provides
that in cases of termination due to
installation of labor-saving devices or
redundancy, the employee shall be paid
separation pay equivalent to one month
salary or one month salary for every year of
service, whichever is higher.
While in case of retrenchment, the
employee must be paid separation pay
equivalent to one month salary or one-half
month pay for every year of service,
whichever is higher, provided that a
franction of at least 6 months is considered
1 whole year.
Company A sold its business to Company B.
The employees of company A who were not
rehired filed a case of illegal dismissal
which the Labor Arbiter affirmed. Is the
same correct?
No, the Labor Arbiter is not correct. No law
prohibits the bona fide sale of a going
enterprise. When that happens, the
purchaser, unless he agrees to do so, has no
legal obligation to continue employing the
employees of the seller. The seller, as
employer is obligated to pay his employees
separation pay and other benefits found on
the law, policy or contract. As long as the
sale is not done in bad faith or to
circumvent the law, the sale should be
upheld.
In the instant case, it is immaterial
if the CBA is yet to expire. The employer,
provided he does so in good faith, may sell
his business. It is only when the sale is
tinged with bad faith that it may be
considered as unfair labor practice and the
doctrine of successor employer may apply.
Labor Law and social legislation
 Labor Relations
  F. Ku
Atty.
Procedure to Terminate Employment
a) What is the period of preventive
suspension? Can it be extended?
b) What is the implication if the 30-
day preventive suspension has
expired and the employee was still
not called back to work? What is
the consequence of an extension
after the expiration of the 30-day
preventive suspension.
a) Preventive suspension, being only an
intermediate protective measure, cannot
last for an indefinite period. The Code’s
implementing rules provide that no
preventive suspension shall last longer than
30 days. After that, the employer shall
reinstate the worker in his former position
or he may extend the period of suspension,
provided that he pays the wages and other
benefits due to the worker. In such case,
the worker shall not be bound to reimburse
the amount paid to him during the
extension if the employer decides, after
completion of the investigation/hearing, to
dismiss the worker.
b) No preventive suspension shall last
longer than 30 days. After that period, the
employer shall reinstate the worker in his
former position or if he extends the period
of suspension, he must pay the wages and
benefits due to the worker.
Preventive suspension exceeding 30
days without reinstating the employee to
his former position or without payment of
the wages and benefits due to the worker,
in case of extension, is tantamount to
constructive dismissal.
What are the grounds for preventive
suspension?
The employer may place the
worker may place the worker under
preventive suspension if his continued
employment poses a serious and imminent
threat to the life or property of the
employer or his co-workers.
What is the concept of progressive
disciplining?
The principle of progressive
disciplining provides that light offenses
deserve light penalties and only grave
offenses deserve grave penalties. The rule
is that the penalty must be commensurate
to the offense.
Thus, while the employer has the
prerogative to dismiss an erring employee,
the penalty does not always have to be
dismissal where a penalty less punitive
would suffice. Dismissal is the supreme
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
penalty and must only be imposed as a last
recourse.
Consequences of Termination
What is/are the consequences of illegal
dismissal? Define each.
Art. 293 of the Labor Code provides
that an employee who is unjustly dismissed
from work is entitled to reinstatement
without loss of seniority rights and other
privileges and to his full backwages,
inclusive of allowances, and to his other
benefits and other monetary equivalent
computed from the time his compensation
was withheld from him up to the time of his
actual reinstatement.
The consequences of dismissal then
are: separation pay, backwages,
reinstatement, damages and attorney’s
fees.
Separation pay may be given either
as a legal obligation for termination due to
authorized causes, as a form of financial
assistance at the court’s discretion, as
payment in lieu of reinstatement when
reinstatement is no longer feasible or as an
employment benefit granted in the CBA or
company policy.
Backwages along with allowances
and benefits or their monetary equivalent
is granted on grounds of equity for earnings
which a worker or employee has lost due to
his illegal dismissal. This is computed from
the time compensation was withheld up to
the time of his actual reinstatement.
Reinstatement restores the
employee who was unjustly dismissed to
the position from which he was removed or
to his status quo ante dismissal.
Moral damages are awarded to
compensate for diverse injuries such as
mental anguish, besmirched reputation, etc.
that sprung from a wrongful act or omission
of the employer. Exemplary damages are
awarded if the dismissal was shown to have
been effected in a wanton, oppressive or
malevolent manner. Nominal damage is
awarded if the dismissal was with just or
authorized cause but there was a violation
of the employee’s right to due process.
Attorney’s fees is awarded when
the employee was compelled to litigate to
protect his interest by reason of the illegal
dismissal.
Are the officers of the company or
corporation liable for illegal dismissal?
Generally, officers are not liable for the
illegal dismissal. It is a basic that a
corporation is invested by law with a
personality separate and distinct from the
persons composing it. The mere fact that
the officer is part of the corporation does
not mean that all its acts are imputed to
Labor Law and social legislation
 Labor Relations
  F. Ku
Atty.
him directly and personally in the absence
of a showing that he acted without or in
excess of his authority or was motivated by
personal ill-will against the employee. His
acts were official acts done in his capacity
as Vice President of the company and on its
behalf.
What is the doctrine of Piercing the
Corporate Veil?
The doctrine of piercing the corporate veil
provides that while the corporation has a
personality separate and distinct from its
stockholders and officers, this should not
be used to commit injustice. The shield of
corporate fiction should be pierced when it
is deliberately and maliciously designed to
evade financial obligations to employees.
The doctrine of piercing the
corporate veil applies only in three basic
areas, namely: (a) defeat of public
convenience as when the corporate fiction
is used as a vehicle for the evasion of an
existing obligation, (b) fraud cases or when
the corporate entity is used to justify a
wrong, protect a fraud, or defend a crime,
and (c) alter ego cases, where a
corporation is merely a fraud since it is a
mere alter ego or business conduit of a
person or where it is merely an
instrumentality, agency or conduit of
another corporation.
Termination by Employee
Is a person who resigns entitled to
separation pay?
The general rule is that an
employee who voluntarily resigns from
employment is not entitled to separation
pay, unless there is a stipulation for
payment of such in the employment
contract or CBA, or payment of the amount
is sanctioned by established employer
practice or policy. (Travelaire & Tours v.
NLRC)
When may an employee terminate his
employment?
Art. 299 of the Labor Code provides that an
employee may terminate without just
cause by serving a written notice on the
employer at least one month in advance.
The employer upon whom no such notice
was served may hold the employee liable
for damages.
An employee may put an end to the
relationship without serving any notice on
the employer for any of the following just
causes:
(1) Serious insult by the employer
on the honor and person of the
employee;
Bance, Shayne Amor
Xavier university – ateneo de cagayan
  S: Portia sorority
(2) Inhuman and unbearable
treatment accorded the
employee;
(3) Commission of a crime or
offense by the employer or his
representative against the
person of the employee or any
of the immediate members of
his family;
(4) Other causes analogous.
What is constructive dismissal?
Constructive dismissal is a quitting because
continued employment is rendered
impossible, unreasonable or unlikely, or an
offer involving a demotion in rank or a
diminution in pay. Constructive dismissal is
a dismissal in disguise.
Retirement
What is retirement? How much is an
employee entitled to receive upon
retirement?
Retirement has been defined as a
withdrawal from office, public station,
business, occupation or public duty. It is a
bilateral act of the parties, a voluntary
agreement between the employer and the
employee whereby the latter, after
reaching a certain age, agrees or consents
to sever his employment with the former.
In case of retirement, the employee shall
be entitled to receive such benefits as he
may have earned under existing laws, CBAs
or agreement, provided that his benefits
under the CBA or any other agreement shall
not be less than those provided in the labor
code.
In the absence of a retirement plan, an
employee upon reaching the age of 60 but
not beyond 65 who has served at least 5
years is entitled to receive retirement pay
equivalent to at least one-half month salary
for every year of service, a fraction of at
least 6 months being considered as 1 whole
year. The term one-half month salary shall
mean fifteen days plus one-twelfth of the
13th month pay and the cash equivalent of
not more than 5 days of sevice incentive
leaves.
Transitory and Final Provisions
Prescription of Offenses and Claims
a) What is the prescriptive period for
the filing of actions for illegal
dismissal and the reckoning point of
such period?
Labor Law and social legislation
 Labor Relations

  F. Ku
Atty.
b) What is the prescriptive period for
the filing of unfair labor practices
cases and the reckoning point of
such period?
c) What is the prescriptive period for
the filing of all money claims
arising from employer-employee
relations accruing during the
effectivity of the Labor Code and
the reckoning point of such period?

a) Actions for illegal dismissal must be

brought within 4 years from the time the
cause of action accrued.

b) Unfair labor practices cases shall be filed

within 1 year from the accrual of such
unfair labor practice.

c) All money claims arising from employer

employee relations during the effectivity of
the Labor Code shall be filed within 3 years
form the time the cause of action accrued.

What is promissory estoppel?

Promissory estoppel may arise from
the making of a promise, even though
without consideration, if it was intended
that the promise should be relied upon, as
in fact it was relied upon, and if a refusal
to enforce it would virtually sanction the
perpetuation of fraud or would result in
other injustice.
The elements of promissory
estoppel are:
(a) a promise was reasonably
expected to induce action or
forbearance;
(b) such promise did in fact
induce such action or
forbearance
(c) the party suffered detriment
as a result. (Accessories
Specialist v. Alabanza)

What constitutes illegal recruitment? When

does illegal recruitment become large-scale
or qualified?

Illegal recruitment means any act of

canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring
workers and includes referring contract
services, promising or advertising for
employment abroad, whether for profit or
not, when undertaken by a non-licensee or
non-holder of authority. (Sec. 5 as amended
by RA 10022)
Illegal recruitment is considered
large scale or qualified when it is
committed against three or more persons
individually or as a group. It is committed
by a syndicate if it is committed by three
or more persons conspiring and conferating
with one another.

Bance, Shayne Amor Labor Law and social legislation

Xavier university – ateneo de cagayan   S: Portia sorority