TERMINATION OF EMPLOYMENT

(Part 6. Consequence of Termination)

9. DAMAGES

The employer terminate the employees services without just cause or without
according him due process, the Labor Arbiters judgment shall be for the employer to
reinstate the employee and pay him backwages, or simply to receive separation pay.
These are reliefs explicitly prescribed by the Labor Code. Any award of moral
damages by the Labor Arbiter obviously cannot be based on the Labor Code but
would be grounded on the Civil Code.

9.1 Moral Damages may be awarded to compensate one for diverse injuries such as
mental anguish, besmirched reputation, wounded feelings and social humiliation. The
employer is liable for moral damages under the provisions of Article 2220 of the Civil
Code providing for damages where the employer acted fraudulently or in bad faith.

9.2 Exemplary Damages - award of moral and exemplary damages in favor of the
employee who was illegally dismissed shall be upheld where the employee had been
harassed by the employer.
ATTORNEYS FEES

In employment termination cases, attorneys fee are not

recoverable where there is no sufficient showing of bad faith on
the part of private respondent (employer).

Who must shoulder the liabilities arising from a wrongful

dismissal? Is the manager that recommended or approved it
liable personally?
(SUNIO DOCTRINE)

when it appears to be no evidence on record that he acted

maliciously or in bad faith in terminating the services of private
respondents, his act was within the scope of his authority and
was a corporate act.
 Government as stockholder not directly liable for corporate indebtedness
Under existing laws and prevailing jurisprudence, a stockholder as a rule is not
directly, individually and/or personally liable for the indebtedness of the
corporation.

Exception: Piercing the Corporate Veil: Officers Become Personally Liable

Generally, officers of a corporation are not personally liable for their official acts
unless it is shown that they have exceeded their authority.

The doctrine of piercing the corporate veil applies only in

three (3) basic acts, namely:

1. defeat of public convenience as when the corporate fiction is used as a vehicle

for the evasion of an existing obligation
2. fraud cases of when the corporate entity is used to justify a wrong, protect
fraud, or defend a crime
3. alter ego cases,
 Sole Proprietorship: Piercing the Veil Doctrine Applies

It is the act of hiding behind the separate and distinct

personalities of juridical entities to perpetuate fraud, commit
illegal acts and evade ones obligations.

Instances When Corporate Officers Become Solidarily Liable

1. When directors and trustees:

(a) vote for or assent to patently unlawful acts of the
corporation
(b) act in bad faith or with gross negligence
(c) are guilty of conflict of interest to he prejudice of the
corporation
2. When director or officer has consented to the
issuance of watered stocks
3. When a director, trustee or officer has
contractually agreed or stipulated to hold
himself personally and solidary liable with the
corporation

4. When a director, trustee or officer is made, by

specific provision of law
Limited Liability of Indirect Employer

Article 106, 107 and 109 hold an employer jointly and severally liable with its
contractor or subcontractor, as if it were the direct employer. However, does not
extend to the payment of backwages and separation pay of employees who were
constructively or illegally dismissed by the contractor.

QUITCLAIM; PUBLIC POLICY PROTECT LABOR

After resigning and executing a quitclaim, may an employee still file a claim
against the employer?

Generally, once an employee resigns and executes a quitclaim in favor of the

employer, he is stopped from filing any further money claim against the
employer arising from his employment.

Even if voluntary executed, agreements are invalid if they are contrary to public
policy.
 TERMINATION OF EMPLOYMENT
(Part 7. TERMINATION OF EMPLOYEE
AND SUSPENSION OF OPERATION)

Art. 299
(a) An employee may terminate without just
cause the employee-employer relationship
by serving a written notice on the employer
at least one (1) month in advance. The
employer upon whom no such notice was
served may hold the employee liable for
damages.

 (b) 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 or his
representative on the honor and person of the
employee;
2. Inhuman and unbearable treatment accorded the
employee by the employer or his representative;
3. Commission of a crime or offense by the
employer or his representative against the person of
the employer or any of the immediate members of his
family; and
4. Other causes analogous to any of the foregoing
WITHDRAWAL OF RESIGNATION
Resignation is withdrawable even if the employee has called it
irrevocable. But after it is accepted or approved by the
employer, its withdrawal needs the employers consent.

RESIGNATION PAY
Is an employee who voluntarily resigned his job entitled
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 Collective Bargaining Agreement.
 CONSTRUCTIVE DISMISSAL; FORCED RESIGNATION

A constructive discharge is quitting because continued employment is

rendered impossible, unreasonable or unlikely, as, an offer involving a
demotion in rank and a diminution in pay. It is an employers act
amounting to dismissal but made to appear as if it were not. A
constructive dismissal is a dismissal in disguise.

Preventive Suspension Beyond 30 Days Amounts to Constructive

Dismissal
Hyatt Taxi Services, Inc. vs. Catinoy, G.R.No.143204,June 26, 2001

NOT CONSTRUCTIVE DISMISSAL: VALID TRANSFER (JALLEA

vs VA Calica G.R. No. 120718, August 14, 1995); Voluntary
Resignation (Concrete Aggregates vs NLRC G.R. No.82458, September
7, 1989) and Resignation to Avoid Dismissal
 Art. 300. WHEN EMPLOYMENT NOT
DEEMED TERMINATED
The bona fide suspension of the operation of a
business or undertaking for a period not
exceeding six (6) months, or the fulfillment by the
employee of a military or civic duty shall not
terminate employment. In all such cases the
employer shall reinstate the employee this former
position without loss of seniority rights if he
indicates his desire to resume his work not later
than one (1) month from the resumption of
operations of his employer or from his relief from
the military or civic duty.
 ART. 301. RETIREMENT
Any employee may be 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 to receive such
retirement benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements: Provided, however,
that an employees retirement benefits under any collective bargaining
and other agreements shall not be less than those provided herein.
In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee upon reaching
the age of sixty (60) years of more, but not beyond sixty-five (65) years
which is hereby declared the compulsory retirement age, who has served
at least five (5) years in the said establishment, may retire and shall be
entitled to retirement pay equivalent to at least one-half (1/2) month
salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.
 An underground mining employee upon reaching the
age of fifty (50) years or more, but not beyond sixty
(60) years which is hereby declared the compulsory
retirement age for underground mine workers, who
has served at least five (5) years as underground
mine worker, may retire and shall be entitled to all
the retirement benefits provided for in this Article.

Retail, service and agricultural establishments or

operations employing not more than ten (10)
employees or workers are exempted from the
coverage of this provision.
Coverage

The retirement pay law applies to:

1. Private sector employees
2. Served for at least 5 years
3. Sixty to sixty five years old
4. Full-time or part-time employees
5. Regular or non-regular

Retirement a withdrawal from office, public station, business, occupation,

or public duty.

Two kinds of retirement

1. compulsory
2. optional