Termination

ARTICLE 279. Security of Tenure.

“In cases of regular employment, the employer shall not

terminate the services of an employee except for a just cause or

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 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.”

SECURITY OF TENURE

It is one of the basic rights of workers (BWC-DOLE).

It is the right not to be removed from one’s job

except for a valid reason and through proper

procedure.

This right is guaranteed in the Constitution.

Excerpts from Sec. 3, Art. XIII of

the 1987 Philippine Constitution

“The State shall afford full protection to labor, local and overseas,

organized and unorganized, and promote full employment and equality of

employment opportunities for all. It shall guarantee the rights of all workers

to self-organization, collective bargaining and negotiations, and peaceful

concerted activities, including the right to strike in accordance with law.

They shall be entitled to security of tenure, humane conditions of work,

and a living wage.”

Though the Article specifies “regular

employment”, security of tenure does not

exclusively apply to regular employment

only. It also applies to non-regular

employment such as fixed-period

employment, seasonal, project and even

probationary employment.

Managerial employees are also entitled to

security of tenure. The fact that one is a

managerial employee does not by itself exclude

him from the protection of the constitutional

guarantee of security of tenure.

(Case Example: PLDT vs. Tolentino,

Sept. 21, 2004)

JUST CAUSES

•Faults and misbehaviors of the employee

•Effectivity date of dismissal is determined by the employer.

•Employer is not legally liable to give separation pay to the dismissed employee.

•Due Process – 2 Notices: a) “Show-Cause Memo”; b) Subsequent Notice informing employer’s decision

ART. 282. Termination by employer. An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (e) Other causes analogous to the foregoing.

Serious Misconduct

•Misbehavior or an improper conduct, which is intentional in

nature

•Transgression of some established and definite rule of action,

a forbidden act, a dereliction of duty, willful in character and

implies wrongful intent and not mere error in judgment

•Grave and not merely trivial

•Must be in connection with work

•Sexual Harassment, Drug Use, Habitual Drunkenness, Acts of Immorality, Falsification of Time Card

WILLFUL DISOBEDIENCE

•Refusal to obey orders, regulations and instructions, which are

reasonable and lawful, well-understood and sufficiently known

by the employee, and related to the employee’s duties

•Must relate to substantial matters, not trivial

•Ex. Refusal to transfer – An employee, as a rule, should obey

an employer’s order to transfer (job assignment, location).

Transfer though should be reasonable and not prejudicial to

the employee and should not involve demotion or diminution

of salary and benefits.

NEGLECT OF DUTIES

•Gross and habitual failure to observe work standards and fulfill

work assignments which tends to prejudice the employer’s

interest

•An employer has the right to impose productivity standards

thus failure to observe these may constitute just cause for

dismissal

•Another example is job abandonment (1) without valid reason

& (2) with clear intention to sever employer-employee

relationship

FRAUD

•Any act, omission, or concealment related to the employee’s

work, which involves breach of legal duty, trust, or confidence

and is injurious to the employer or its representatives

•Implies willfulness or wrongful intent, ergo, the innocent non-

disclosure of facts will not constitute just cause for dismissal

LOSS OF CONFIDENCE

• Willful breach of trust done by employees occupying

positions of trust and confidence

• It is the breach that results in employer’s loss of confidence

in the employee.

COMMISSION OF CRIME OR

OFFENSE

•Crime against the employer or the employer’s family member – spouse,

ascendants, descendants, siblings (legitimate, natural or adopted), siblings

of his relative by affinity in the same degrees or by consanguinity within the

fourth civil degree

•An employee may be acquitted in a criminal case and yet his dismissal by

the employer may remain. The only requirement mentioned is commission

of a crime, and not conviction. To convict a criminal requires proof beyond

reasonable doubt; to dismiss an employee requires only substantial

evidence.

ANALOGOUS CAUSES

• Equivalent to the just causes enumerated done voluntarily or

willfully by the employee not to the employer but maybe to

the vendor, customer, visitor, etc.

• Example: Violago Trucks & Petrophil Case

AUTHORIZED CAUSES

•Business and economic reasons & Disease

•Employer is legally required to give separation pay to the employee, except in the case of company closure or cessation of operation/s due to business losses.

•No hearing needed

Employer has to give the employee and DOLE written notices thirty (30) days ahead of the projected separation.

ART. 283. Closure of establishment and reduction of personnel.

The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses

or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title,

by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving 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 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 undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every

year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

ART. 284. Disease as ground for termination.

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 at least one (1) month salary or to one-half (1/2)

month salary for every year of service, whichever is greater, a fraction of

at least six (6) months being considered as one (1) whole year.

AUTOMATION

• Reduction of the number of workers due to new machinery

• Manufacturer has the right to use new labor-saving devices

with an aim to effect more economy and efficiency in

production.

• Separation Pay = at least one month pay or at least one

month pay for every year of service, whichever is higher

(bigger amount since business is still profitable)

REDUNDANCY

•Services of an employee are in excess of what is actually required by

the industry; maybe due to over-hiring of workers, decreased business

volume, dropping of a product line/service activity, streamlining,

mergers and reorganization

•Management must show adequate proof that the abolished positions were

unnecessary.

•Separation Pay = at least one month pay or at least one month pay for

every year of service, whichever is higher (bigger amount since business is

still profitable)

RETRENCHMENT

• Termination of employees due to substantial and imminent loss and this

loss must be proven by convincing evidence. Termination is also done

when it is seen as a necessary step in effectively preventing further

losses.

• Conditions: (1) Intended to prevent losses and such losses are proven; (2)

Written notices are served on the workers and the DOLE at least one

month before the effective date of retrenchment; (3) Separation pay is

paid to the affected workers; (4) There must be fair and reasonable criteria

in determining the employees to be dismissed (i.e. temporary employees

first, efficiency rating, and seniority)

RETRENCHMENT

• Justifications: (a) Substantial losses; (b) Substantial loss must be

reasonably imminent which can be perceived objectively and done in good

faith; (c) Reasonably necessary, likely to prevent more losses and done

as a last resort; (d) Sufficient and convincing evidence for losses

• In selecting employees, the “Last In – First Out” (LIFO) rule, though not

statutory, has its merits. Selection is part of management’s prerogatives

unless this is stipulated in a CBA for organized companies.

• Separation Pay = one month pay or at least one-half month pay for every

year of service, whichever is higher

CLOSURE OR CESSATION

• Firm required to cease operations due to government mandate (i.e.

acquisition of land for agrarian reform), firm suffering serious business

decline and loss, or if firm owner wants to discontinue business for

personal reasons, but in good faith, is allowed to close.

• Cessation not due to business loss should meet the following

conditions: (1) Written notice to employees and DOLE at least one

month before intended date of termination; (2) Cessation from business

operations must be bona fide in character; (3) Payment to the employees

of termination pay amounting to at least one-half month pay for each

year of service or one month pay, whichever is higher

ARTICLE 284. DISEASE AS GROUND FOR TERMINATION

DISCUSSION:

A medical certificate issued by a competent public health authority is still

needed for termination to take place even though disease does not

warrant the employee to continue working according to law or as

considered detrimental to his own health or the health of his co-workers.

A company physician is not considered a competent public health

authority thus a certificate issued by him is not accepted as a basis for

termination of employment.

There are two facets of

valid termination:

1. Legality of the act of dismissal

a. If found illegal, employee is entitled to reinstatement with backwages up to the time of his actual reinstatement if the contract of employment is not for a definite period.

b. If found illegal, employee is entitled to payment of

salaries corresponding to the unexpired portion of the employment contract.

2. Legality in the manner of dismissal

DUE PROCESS IN AUTHORIZED CAUSES

•Employer has to give though the employee and DOLE

written notices thirty (30) days ahead of the projected

separation.

•The purpose for requiring a thirty-day written notice before

an employee is laid off is not to afford him opportunity to be

heard on any charge against him, for there is none. Rather,

this is done to give him time to prepare for the eventual loss

of his job and the DOLE an opportunity to determine

whether economic causes do exist justifying termination.

“Termination of employment is not anymore a mere

cessation or severance of contractual relationship but

an economic phenomenon affecting members of the

family. This explains why, under the broad principles of

social justice, the dismissal of employees is adequately protected by the laws of the State.”

(Alhambra Industries, Inc. vs. NLRC, Nov. 18, 1994, as cited by Chan, 2000)

ART. 247. Concept of unfair labor practice and procedure for prosecution thereof.

Unfair labor practices violate the constitutional right of workers and employees to self-organization, are

inimical to the legitimate interests of both labor and management, including their right to bargain

collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect,

disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations.

Consequently, unfair labor practices are not only violations of the civil rights of both labor and

management but are also criminal offenses against the State which shall be subject to prosecution and

punishment as herein provided.

Subject to the exercise by the President or by the Secretary of Labor and Employment of the powers

vested in them by Articles 263 and 264 of this Code, the civil aspects of all cases involving unfair labor

practices, which may include claims for actual, moral, exemplary and other forms of damages,

attorney’s fees and other affirmative relief, shall be under the jurisdiction of the Labor Arbiters. The

Labor Arbiters shall give utmost priority to the hearing and resolution of all cases involving unfair labor

practices. They shall resolve such cases within thirty (30) calendar days from the time they are

submitted for decision.

Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code.

No criminal prosecution under this Title may be instituted without a final judgment finding that an

unfair labor practice was committed, having been first obtained in the preceding paragraph. During the

pendency of such administrative proceeding, the running of the period of prescription of the criminal

offense herein penalized shall be considered interrupted: Provided, however, that the final judgment in

the administrative proceedings shall not be binding in the criminal case nor be considered as evidence

of guilt but merely as proof of compliance of the requirements therein set forth.

ART. 248. Unfair labor practices of employers It shall be unlawful for an employer to commit any of the following unfair labor practice:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

(b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall

withdraw from one to which he belongs;

(c) To contract out services or functions being performed by union members when such will interfere with, restrain

or coerce employees in the exercise of their rights to self-organization;

(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization,

including the giving of financial or other support to it or its organizers or supporters;

(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to

encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop

the parties from requiring membership in a recognized collective bargaining agent as a condition for employment,

except those employees who are already members of another union at the time of the signing of the collective

bargaining agreement. Employees of an appropriate bargaining unit who are not members of the recognized

collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by

members of the recognized collective bargaining agent, if such non-union members accept the benefits under the

collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph (o)

of this Code shall not apply to the non-members of the recognized collective bargaining agent;

(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about

to give testimony under this Code;

(g) To violate the duty to bargain collectively as prescribed by this Code;

(h) To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in

collective bargaining or any other dispute; or

(i) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations,

associations or partnerships who have actually participated in, authorized or ratified unfair labor practices shall be

held criminally liable.

UNFAIR LABOR PRACTICES

•refers to acts opposed to the right to organize or to engage in lawful concerted activities for collective bargaining or for the workers’ mutual aid and protection

•Two Elements – (1) Employer-employee relationship exists between the offender and the offended; (2) Act done is expressly defined in the Code as an unfair labor practice

There are two (2) aspects, namely: (1) Civil; and (2) Criminal. Labor Arbiters shall have jurisdiction over the civil aspect of all cases involving unfair labor practices, which may include claims for actual, moral, exemplary and other forms of damages, attorney’s fees and other affirmative relief. No criminal prosecution may be instituted without a final judgment finding that an unfair labor practice was committed having been first obtained in the labor case.

•Not every unfair act is an unfair labor practice.


1. INTERFERENCE, RESTRAINT OR COERCION – interference may be

considered ULP even when it is committed before union is formally registered.

Example of unlawful acts are dismissal of union members upon refusal to give

up membership and dismissal of an employee allegedly for inefficiency, on

account of her having joined a union or union activities.


2. Yellow dog contract - promise exacted from workers or prospective employees

that they will not belong to or form a union if hired. If he does, he’ll lose his job.

The typical yellow dog contract embodies the ff: representation by the

employee that he is not a member of a labor organization, promise by the

employee that he will not join a union, and a promise by the employee that

upon joining a labor organization, he will quit his job.


3. SUBCONTRACTING - The act of an employer in having work or certain

services or functions being performed by union members be contracted out is

not generally an unfair labor practice act. It is only when the contracting out of

a job, work or service being performed by union members will interfere with,

restrain or coerce employees in the exercise of their right to self-organization

that it shall be unlawful and shall constitute unfair labor practice. If the motive

then is to prevent employees from organizing or to get rid of union members or

to escape his statutory duty to bargain collectively with the employees’

bargaining representative, then the contracting becomes ULP.


4. COMPANY-DOMINATION OF UNION – manifested in the following forms:

a. Initiation of the company union idea – either outright formation by the

employer or its representatives, employee formation on outright demand

or influence by employer, or managerially motivated formation

b. Financial support to the union – defray union expenses or paying for

lawyer’s fee

c. Employer encouragement and assistance – immediately granting

exclusive recognition even without checking if union has majority

representation

d. Supervisory assistance – soliciting membership, permitting union

activities during work time or coercing employees to join union with threats

of certain penalties


5. DISCRIMINATION – To discriminate in regard to wages, hours of work and

other terms and conditions of employment in order to encourage or discourage

membership in any labor organization.

**Union security clause – any form of agreement which imposes upon employees

the obligation to acquire or retain union membership at the expense of their

employment upon failure to do so. (valid discrimination since favors unionism)


6. RETALIATION – To dismiss, discharge or otherwise prejudice or

discriminate against an employee for having given or being about to give

testimony under this Code. Employer’s retaliation against employee

regardless of employer’s purpose and regardless of the nature or subject

matter of the employee’s testimony


7. To violate the duty to bargain collectively as prescribed by this Code

8. To pay negotiation or attorney’s fees to the union or its officers or

agents as part of the settlement of any issue in collective bargaining

or any other dispute – part of Company Domination of Union

9. To violate a collective bargaining agreement - but only if gross in

character.


* The “totality of conduct doctrine” means that expressions of opinion by an

employer, though innocent in themselves, may be held to be constitutive of

unfair labor practice because of the circumstances under which they were

uttered, the history of the particular employer’s labor relations or anti-union

bias or because of their connection with an established collateral plan of

coercion or interference.

* A “runaway shop” is an industrial plant moved by its owners from one location

to another to escape union labor regulations or state laws.

* Closure – sale or closure of a business enterprise done with bad faith

Termination

Business

Transcript of Termination