1.

Due process cannot be dispensed with despite wider discretion in terminating

managerial and confidential employees. Although employers have wider latitude of
discretion in terminating a managerial employee, it is nonetheless settled that
confidential and managerial employees cannot be arbitrarily dismissed at any time, and
without cause as reasonably established in an appropriate investigation. Such
employees, too, are entitled to security of tenure, fair standards of employment and the
protection of labor laws. Managerial employees, no less than rank-and-file laborers are
entitled to due process.
Resignation; Definition. Resignation is the voluntary act of employees who are
compelled by personal reasons to disassociate themselves from their employment. It
must be done with the intention of relinquishing an office, accompanied by the act of
abandonment. (Casa Cebuana Incorporada, et al. vs. Leuterio, G.R. No. 176040,
September 4, 2009.)

2.

It is the employees burden to establish fact of dismissal. While the employer

bears the burden in illegal dismissal cases to prove that the termination was for valid or
authorized cause, the employee must first establish by substantial evidence the fact of
dismissal from service. (Romero vs. Tri-Union International Corp., G.R. No. 176700,
September 4, 2009.)

3.

Voluntary retirement distinguished from Involuntary retirement. Voluntary

retirement cuts employment ties leaving no residual employer liability; Involuntary
retirement amounts to a discharge, rendering the employer liable for termination without
cause. The employees intent is the focal point of analysis. In determining such intent,
the fairness of the process governing the retirement decision, the payment of stipulated
benefits, and the absence of badges of intimidation or coercion are relevant parameters.
Employment contracts generally bind the parties to their terms; Exceptions. Although
contracts executed in the context of employment are imbued with public interest,
triggering closer scrutiny, they remain contracts binding the parties to their terms. To
excuse the employees from complying with the terms of their waivers, they must locate
their case within any of three narrow grounds: (1) the employer used fraud or deceit in
obtaining the waivers; (2) the consideration the employer paid is incredible and
unreasonable; or (3) the terms of the waiver are contrary to law, public order, public
policy, morals or good customs or prejudicial to a third person with a right recognized by
law. (Quevado, et al., vs. Benguet Electric Cooperative, et al., G.R. No. 168927,
September 11, 2009.)

4.

Rules of procedure; Proper recourse from decision of the Court of Appeals. The
proper recourse of an aggrieved party to assail the decision of the Court of Appeals is to
file a petition for review on certiorari under Rule 45 of the Rules of Court. The Rules
precludes recourse to the special civil action for certiorari if appeal, by way of a petition
for review is available, as the remedies of appeal and certiorari are mutually exclusive
and not alternative or successive. For a writ of certiorari to issue, a petitioner must not
only prove that the tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of jurisdiction but must also show that he has no plain,
speedy and adequate remedy in the ordinary course of law.

Burden of proof in termination cases. In termination cases, the burden of proof rests upon
the employer to show that the dismissal was for a just and valid cause and failure to
discharge the same would mean that the dismissal is not justified and therefore illegal.
Ibid.; Abandonment of work. To prove that the employee abandoned his work, it is
incumbent upon the employer to prove: (1) that the employee failed to report for work or
had been absent without valid or justifiable reason; and (2) that there must have been a
clear intention to sever the employer-employee relationship as manifested by some overt
acts. The burden of proof to show that there was unjustified refusal to go back to work
rests on the employer. (Tacloban Far East Marketing Corporation, et al. vs. Court of
Appeals, et al., G.R. No. 182320, September 11, 2009.)
5.

Sleeping on duty and leaving work area as serious misconduct. Sleeping on the
job without prior authorization was held to constitute serious misconduct and is a valid
ground for dismissal. The court considered that the employee in this case (Tomada) was
directly responsible for a significant portion of his employers property. Tomadas act
was not merely a disregard company rules, but in effect an open invitation for others to
violate those same company rules.
Court denies financial assistance despite employees long years of service. Although his
nearly two decades of service might generally be considered for some form of financial
assistance to shield him from the effects of his termination, Tomadas acts reflect a
regrettable lack of concern for his employer. If length of service justifies the mitigation of
the penalty of dismissal, then this Court would be awarding disloyalty, distorting in the
process the meaning of social justice and undermining the efforts of labor to cleanse its
ranks of undesirables. (Eduardo M. Tomada, Sr., RFM Corporation, et. al, G.R. No. 163270
September 11, 2009.)

6.

Acceptance of award or benefit by individual members not a waiver of the unions

claim. Union members individual acceptance of the award and the resulting payments
made by company does not operate as a ratification of the DOLE Secretarys award; nor
a waiver of their right to receive further benefits, or what they may be entitled to under
the law. Necessitous men are not, truly speaking, free men; but to answer a present
emergency, will submit to any terms that the crafty may impose upon them.
CBA signing bonus presupposes successful negotiation. A signing bonus is a grant
motivated by the goodwill generated when a CBA is successfully negotiated and signed
between the employer and the union. When no CBA was successfully negotiated by the
parties, there shall be no basis to allow an award of signing bonus.
N.B. In this case, the court awarded signing bonus because the petitioner failed to
question the original award of signing bonus despite unsuccessful negotiation. The court
held thus: A bonus is a gratuity or act of liberality of the giver; when petitioner filed the
instant petition seeking the affirmance of the DOLE Secretarys Order in its entirety,
assailing only the increased amount of the signing bonus awarded, it is considered to
have unqualifiedly agreed to grant the original award to the respondent unions
members. (University of Santo Tomas vs. Samahang Manggagawa ng UST (SM-UST),
G.R. No. 169940, September 14, 2009.)

7.

Requisites of a valid Retrenchment (to prevent losses). In order to justify

retrenchment of employees as a measure to avoid or minimize business losses, the
employer must satisfy certain established standards, all of which must concur, viz.:

1.

That retrenchment is reasonably necessary and likely to prevent business

losses which, if already incurred, are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent as perceived objectively
and in good faith by the employer;

2.

That the employer served written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the intended date of
retrenchment;

3.

That the employer pays the retrenched employees separation pay

equivalent to one (1) month pay or at least one half (1/2) month pay for every year of
service, whichever is higher;

4.

That the employer exercises its prerogative to retrench employees in good

faith for the advancement of its interest and not to defeat or circumvent the employees
right to security of tenure; and

5.

That the employer used fair and reasonable criteria in ascertaining who
would be dismissed and who would be retained among the employees, such as status,
efficiency, seniority, physical fitness, age, and financial hardship for certain workers.
Decrease in revenue not necessary business losses within the meaning of Article
283. Sliding incomes or decreasing gross revenues alone do not necessarily indicate
business losses within the meaning of Article 283, for, in the nature of things, the
possibility of incurring losses is constantly present in business operations. The employer
must prove the stringent requirement that the loss was substantial, continuing and
without any immediate prospect of abating.
Retrenchment should only be resorted after less drastic measures have
failed. Retrenchment should only be resorted to when other less drastic means, such as
the reduction of both management and rank-and-file bonuses and salaries, going on
reduced time, improving manufacturing efficiency, reduction of marketing and
advertising costs, faster collection of customer accounts, reduction of raw materials
investment and others, have been tried and found to be inadequate. (Bio Quest
Marketing Inc., et al. vs. Edmund Rey, G.R. No. 181503, September 18, 2009.)

8.

POEA Standard Employment Contract; Seafarers who died during employment

entitled to death benefits; Exception. The general rule is that the employer is liable to
pay the heirs of the deceased seafarer for death benefits once it is established that he
died during the effectivity of his employment contract. However, the employer may be
exempted from liability if he can successfully prove that the seafarers death was caused
by an injury directly attributable to his deliberate or willful act. (Great Southern Maritime
Services, Inc., et al. vs. Leonila Surigao, et al., G.R. No. 183646, September 18, 2009.)

9.

Appeal from decision of Labor Arbiter; Appeal bond mandatory. The posting of a
bond is indispensable to the perfection of an appeal in cases involving monetary awards
from the decision of the Labor Arbiter. The lawmakers clearly intended to make the bond
a mandatory requisite for the perfection of an appeal by the employer as inferred from

the provision that an appeal by the employer may be perfected only upon the posting of
a cash or surety bond.
Ibid.; Appeal bond also a jurisdictional requirement. The filing of the bond is not only
mandatory but a jurisdictional requirement as well, that must be complied with in order
to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of
the Labor Arbiter final and executory.
Ibid.; Purpose of appeal bond. Appeal bond is intended to assure the workers that if they
prevail in the case, they will receive the money judgment in their favor upon the
dismissal of the employers appeal. It is intended to discourage employers from using an
appeal to delay or evade their obligation to satisfy their employees just and lawful
claims.
Ibid.; Requirements for reduction of appeal bond. The bond may be reduced upon motion
by the employer subject to the following conditions viz. (1) the motion to reduce the
bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to
the monetary award is posted by the appellant, otherwise the filing of the motion to
reduce bond shall not stop the running of the period to perfect an appeal. (Andrew James
Mcburnie vs. Eulalio Ganzon, et al., G.R. Nos. 178034 & 178117; G.R. Nos. 186984-85,
September 18, 2009.)
10.

Entitlement to retirement benefits of previously resigned employees. Entitlement

of employees to retirement benefits must specifically be granted under existing laws, a
collective bargaining agreement or employment contract, or an established employer
policy. In this case, no law or collective bargaining agreement or other applicable
contract, or an established company policy was existing during the employees
(respondents) employment entitling them to the P200,000 lump-sum retirement pay. The
company (petitioner) was not thus obliged to grant them such pay.
Binding effect of quitclaims executed by employees. While quitclaims executed by
employees are commonly frowned upon as being contrary to public policy and are
ineffective to bar claims for the full measure of their legal rights, where the person
making the waiver has done so voluntarily, with a full understanding thereof, and the
consideration for the quitclaim is credible and reasonable, the transaction must be
recognized as being a valid and binding undertaking. (Kimberly-Clark Philippines, Inc. vs.
Nora Dimayuga, et al., G.R. No. 177705, September 18, 2009.)

11.

Termination of employment; Abandonment; Burden of proof. Abandonment is a

form of neglect of duty, one of the just causes for an employer to terminate an
employee. It is a hornbook precept that in illegal dismissal cases, the employer bears the
burden of proof. For a valid termination of employment on the ground of abandonment,
employer must prove, by substantial evidence, the concurrence of employees failure to
report for work for no valid reason and his categorical intention to discontinue
employment. (Odilon L. Martinez vs. B&B Fish Broker, G.R. No. 179985, September 18,
2009.)

12.

POEA Standard Employment Contract; Disability benefit under Section 20(B);

Requirements. A seafarer may claim disability benefits under Section 20(B) of the 1996
POEA Standard Contract of Employment for Seafarers (Contract) only if he suffers a workrelated injury or illness during the term of his contract. In this case, respondent admitted

that he had been previously diagnosed with diabetes four years before he was engaged
by petitioners as chief cook of M/V White Arrow. Clearly, he was not afflicted with the said
illness only during the term of his contract but even prior to his employment. He did not
even complain of any complications of the disease at any time during his employment.
Moreover, even assuming respondent contracted the disease during the term of his
contract, he was precluded from claiming disability benefits for his failure to comply with
Section 20(B)(3) of the Contract. The provision requires a claimant to submit himself to a
company-designated physician three days after his arrival in the Philippines for medical
examination and failure to do so bars the filing of a claim for disability benefits. Neither is
respondent entitled to disability benefits under Section 32-A of the Contract since
diabetes is not one of the compensable occupational diseases listed there. (Bandila
Maritime Services, Inc., et al. vs. Rolando Dubduban, G.R. No. 171984, September 29,
2009.)
Last Edited: Friday, August 19, 2011
Caveat: Subsequent court and administrative rulings, or changes to, or repeal of, laws,
rules and regulations may have rendered the whole or part of this article inaccurate or
obsolete.