POST EMPLOYMENT/ TERMINATION OF EMPLOYMENT

1. Classification of employees
A295: Despite written agreement to the contrary and regardless or any oral agreement
1.1. Regular: those engaged to perform activities usually necessary or desirable in the usual business or employer OR those
who have rendered at least 1 year of service, whether continuous or broken, with respect to the activity they are employed
- Arises from nature or duration of work and not stipulation of employment contract
1.2. Casual:
1.3. Project: those assigned to carry out a specific project or undertaking with a specified duration and scope
- Co-terminus with the project; period and not importance is the measure
- Assignment to a specific project must be implemented in good faith
- Employer has no obligation to pay separation pay
- Project employee or member of a work pool may acquire status of regular employee when there is continuous rehiring
AND task performed is vital/indispensable/necessary to usual business of employer
- The fact that an employee is hired to render necessary services for more than a year does not invalidate project
employment
1.4. Seasonal:
1.5. Fixed Term: employment until a day certain that may not be definite but may necessarily come
- Determinant is day certain knowingly agreed upon without force, duress, pressure or moral dominance
1.6. Contractual:
1.7. Probationary: shall not exceed 6 months from date employee started working, except apprentices covered by
apprenticeship agreement
- If employee is allowed to work after the probationary period, he shall be considered a regular employee

2. Termination
- Guidelines to determine validity of termination: (GDPPL):
1) Gravity of offense
2) Degree of damage to employer
3) Position occupied by employee
4) Previous infractions
5) Length of service
- Totality of Infractions Doctrine: number of violations during employment shall be considered penalty imposed
- Offer to reinstate employee after filing a complaint for illegal dismissal cannot validate the dismissal
2.1. Grounds (Just/Authorized Causes):
- Just Causes: (SWAG FC)
1) Serious misconduct- grave transgression that implies wrongful intent
 Ex. Sexual harassment, fighting in company premises, cursing at superior, falsification of time records
2) Willful disobedience or insubordination- order must be reasonable and pertain to duties
 Employee is not insubordinate for refusing a promotion since no law compels employees to accept promotion
 Ex. Failure to answer memo to explain, refusal to undergo drug testing, refusal to render mandatory OT
3) Analogous cases
 Ex. Drunkenness, gross inefficiency, or violation of company rules
4) Gross and habitual neglect of duties
 Gross- absence of diligence of an ordinary prudent man
 Habitual-repeated failure to perform one’s duties
 Ex. Habitual tardiness and absenteeism or abandonment of work
5) Fraud or willful breach of trust
 Must be work related, committed against the employer or his representative
 Employee must be holding a position of trust and confidence like a managerial employee or employee handling a
significant amount of money or property
 Different degree of proof required as breach of trust is sufficient to dismiss a managerial employee but actual proof of
involvement in alleged events needed in dismissal of rank-and-file
6) Crime or offense
 Must be committed against the employer, an immediate member of the employer’s family, or employer’s representative
- Other Just causes under the Labor Code:
1) Deliberate participation in an illegal strike
2) Illegal acts during strike
3) Violation of prohibitions or injunctions issued by the SOLE or NLRC
4) Violation of union security clause
- Authorized Causes: (ARRC)
1) Automation
 Must be-
 >> Done in good faith
>> To save on costs or enhance efficiency
>> Only option for the employer
>> Fair and reasonable criteria in selecting employees to be terminated
2) Redundancy- services of an employee are in excess of what is reasonably demanded by the enterprise
 Must be in good faith, attended by a fair and reasonable criteria, and adequate proof of redundancy such as staffing
pattern, feasibility studies, viability of newly created positions, and approval of management of restructuring
3) Retrenchment or Downsizing- reduction of personnel due to poor financial returns; cost-cutting measure
 Last In, First Out Rule- when there are two or more employees occupying the same position, the last one employed must
be the first to go according to jurisprudence
>> Not mandated by law
 Hobson’s Choice- no choice at all like when employees are given the choice to retire, be retrenched, or be dismissed
without any benefits
4) Closure or cessation of operation- may be complete or partial
 Must either address financial losses or to promote business interests with no other option available
- Common requisites of authorized causes:
a) Good faith
b) Last resort
c) Twin written notices on both the employees and DOLE at least 1 month prior to date of termination
d) Separation pay, in general
- Another ground for termination is disease when it is prejudicial to the subject employee or colleagues as certified by a
competent public health authority
 Requirement of a medical certificate cannot be dispensed with
- Other authorized causes are total and permanent disability of employee and relocation
- Procedural steps in authorized causes:
1) Written notice to DOLE 30 days prior to intended date of termination
2) Written notice to employee concerned 30 days prior to intended date of termination
 Notice within a reasonable amount of time if termination is based on employee’s failure
 No notice when termination is due to completion of contract
2.2. Procedural requirements/ Reliefs for Non-Compliance:
- Twin Notice Rule: the employer is required to furnish an employee 2 written notices before termination
1) Pre-notice- written notice specifying material dates and acts committed that may constitute grounds for termination
2) Post-notice- written notice indicating grounds that justify termination after employee had been given time to receive
and answer claims
- Hearing is not necessarily required but it is the opportunity to be heard that is the actual test of due process
 ‘Ample opportunity to be heard’ is the Labor Code standard
 When employee admits acts complained of, no formal hearing is necessary
 Formal hearing becomes necessary only when requested by the employee
- Burden of proof rests upon employer to prove that dismissal is for a just or authorized cause
- Degree of proof is substantial evidence, as in administrative or quasi-judicial proceedings
 Substantial evidence- not a mere scintilla but an amount relevant that a reasonable mind may deem adequate
- When dismissal is for a just or authorized cause but due process was not observed, dismissal should be upheld but
employer should be liable for damages for violating procedural due process rights of employee
 Modified by jurisprudence which mandated a harsher penalty when dismissal is for an authorized cause because the
same is initiated by the employer
>> Modified again in that if authorized cause is due to losses, penalty to employer should be lighter
- Instances when hearing is not required:
1) Admission of guilt by employer
2) Authorized causes under A283
3) Disease under A299
4) Resignation
5) Termination after a bona-fide suspension of operation
6) Expiration of fixed-period employment
7) Casual, contractual, project, probationary, or seasonal employment
8) Abandonment
9) Closure or stoppage of work by gov’t

3.Reliefs for Illegal Dismissal

3.1. Backwages
- May be awarded even if not prayed for
- Computed from time of illegal dismissal up to actual reinstatement
  If reinstatement is no longer possible, then backwages is computed until finality of the decision
- Computation must include allowances, converted leave credits, 13 th month pay
- May not be reduced by wages earned elsewhere during period of dismissal
3.2. Reinstatement
- Types/Forms:
a) Actual or physical reinstatement
b) Payroll reinstatement
- Reinstatement order by LA is immediately executory pending appeal and may be in the form of actual or payroll
 Reinstatement order of NLRC is not immediately executory and once it becomes final, only actual reinstatement or
separation pay in lieu of reinstatement may be ordered
 If NLRC reverses the reinstatement order of the LA, then the employee is not required to return the wages he received
during the NLRC proceedings
>> Employee may be barred to collect wages if the delay in enforcing reinstatement is not the employer’s fault
- Court may order reinstatement even if the Complaint did not pray for such relief under the principle that an employee
unjustly dismissed would be entitled to such
 If position is already occupied, then a substantially equivalent position must be given
- Employer does not have the option to choose between reinstatement and separation pay
3.3. Separation Pay
- Under present laws and jurisprudence, separation pay may be viewed in 4 ways:
1) In lieu of reinstatement in illegal dismissal cases
 Components of SPIR are:
a. At least 1 month salary for every year of service with a fraction of at least 6 months being considered a year
b. Allowances received on a regular basis
2) As a statutory obligation of employers in A297 and A298
3) As financial assistance or an act of social justice in valid dismissals under A296
4) As an employment benefit granted in the CBA or as a company policy
- Generally, an employee is not entitled to separation pay so as not to incentivize dismissal caused by him
 Except if it is a matter of social justice
- Where there is closure due to serious financial losses or to act of the government, no separation pay is required
3.4. Damages
- Jurisprudence has held that nominal damages may be given in dismissal
 30K if based on a just cause, but no more backwages since dismissal is legal
 50K if based on authorized cause
- An employer upon whom no notice was served at least 1 month before termination may hold the employee liable for
damages if the latter terminates his own employment without just cause
 If there is just cause like serious insult, unbearable treatment, commission of a crime, and analogous cases no need for
employee to notify employer
4. Doctrine of Strained Relations: ER-EE relationship is so ruptured as to preclude a harmonious working arrangement that
should reinstatement is decreed, both parties may be spared the agony of an atmosphere of antagonism if separation pay is
paid in lieu of reinstatement.
- Requisites:
1) Employee occupies a position of trust
2) Atmosphere of antagonism would be generated if reinstatement is pursued

5. Preventive Suspension
- Only applicable if:
1) Evidence of guilt is strong and employer is convinced that employee would constitute a distraction
2) Continued employment would pose a serious and imminent threat to life or property
- Must only be for a maximum of 30 days
- Employee is not entitled to wages during preventive suspension, unless company policy or CBA states so

6. Resignation V. Constructive Dismissal

- Resignation: voluntary act of employees compelled by personal reasons to dissociate from employment
 Must be done with intent to relinquish office accompanied by an act of abandonment
 Employee must serve written notice to employer at least 1 month in advance
>> Once accepted, resignation cannot be withdrawn without consent of employer
 Even if option to resign originated from employer, it may still be a voluntary resignation
 Employee who voluntarily resigns is not entitled to separation pay
 Resignation may be deemed such even if the employee did not mention the word resign
- Constructive dismissal: acts of clear discrimination, demotion or diminution of pay, or floating status for more than 6
months in contravention of 30-day limit for preventive suspension
  Test is whether a reasonable person in the employee’s position would give up his position under the circumstances

7. Floating status: should last only for a legally prescribed period of time not exceeding 6 months
- If more than 6 months, he may be considered constructively dismissed
- A reason may be mandatory military service

RETIREMENT
- Result of bilateral act or voluntary agreement between employer and employees whereby the latter, after reaching a
certain age, consents sever his employment

1. Coverage: A302 of the Labor Code applies to all employees of the private sector regardless of position or how their wages
are paid
- Does not apply to employees of government including GOCCs governed by Civil Service Laws and employees of retail,
service, and agricultural establishments regularly employing not more than 10 employees
- Domestic helpers and those in personal service of another are also excluded
2. Types (Optional/Compulsory)
- Optional if 60 but less than 65 and having served at least 5 years
- Compulsory if more than 65
 However, A302 of the Labor Code permits employers to fix retirement at below 60
- Other kinds are contributory, those governed by the CBA or employment contract, or voluntarily given by employer

3. Retirement Plan/Company Policy

- A retiree is entitled to a retirement pay equivalent to at least ½ month salary for every year of service, with a fraction of at
least 6 months being considered as 1 year
 ½ month salary is 22. 5 days per year of service as 2.5 days representing 1/12of the 13 th month pay and not more than
5 days of SIL are counted
- A retirement plain in a company is in the nature of the contact