MODULE 10 the parties without force, duress or improper
pressure upon the employee and if it
BOOK VI POST EMPLOYMENT
What is security of tenure?
Under the Labor Code, 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.
Note: However non-regular employees are also entitled
to security of tenure but in a qualified manner in the
sense that they cannot be dismissed without just or
authorized cause prior to the expiration of the term of
their employment.
What is a regular employment?
Under the Labor Code, “The provisions of written
agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, 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 the employer…”
What is a non-regular employment?
The following are non-regular employment:
1. Project employment – They are non-regular
regardless of the number of years that it would
take to finish the undertaking and regardless of
the number of projects in which the employee
has worked on.
2. Seasonal employment – However, if the same
employees are repeatedly engaged every season,
they become regular seasonal employees. Thus,
during off-season, the employment of these
regular seasonal employees is not severed but
merely suspended.
3. Casual employment – This is a job where the
activities performed by the employee are NOT
usually necessary or desirable in the usual
business or trade of the employer. However, 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.
4. Fixed-term employment – This is valid if they
were knowingly and voluntarily agreed upon by
satisfactorily appears that the employer and
employee dealt with each other on more or less
equal terms with no moral dominance whatever
being exercised by the former on the latter.
5. Probationary employment – Here, the employee
undergoes a trial period (6 months) to enable the
employer to determine his fitness for regular
employment on the basis of reasonable standards
made known to him at the time of engagement.
The period may go beyond 6 months if
stipulated, established by company policy,
required by the nature of work, to give the
employee a chance to improve or covered by an
apprenticeship agreement stipulating a longer
period. A learner or apprentice is considered as
on probation so he/she can no longer be put
under probationary status in the same company
where he/she trained. The services of a
probationary employee may be terminated for
any of the just or authorized causes or for failure
to qualify as a regular employee in accordance
with reasonable standards made known by the
employer at the time of his engagement.
Note: The activities performed by these employees are
also usually necessary in the usual business or trade of
the employer, but their employment is considered as
non-regular because their engagement is only for a
limited term, i.e., for the duration of the project, season,
agreed period or trial period.
What are the just causes for the termination or
dismissal of an employee?
An employer may terminate an employment for any of
the following causes:
1. Serious misconduct or willful disobedience by
the employee of the lawful orders of his
employer or representative in connection with
his work;
2. Gross and habitual neglect by the employee of
his duties;
3. Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative;
4. 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; Prior conviction is
not required.
5. Other causes analogous to the foregoing.
What are the authorized causes for termination of
employment?
The following are the authorized causes for termination
of employment:
1. Installation of labor saving devices
2. Redundancy – This is a situation where the
services of an employee are in excess of what is
reasonably demanded by the actual requirements
of the enterprise. The requisites of a valid
redundancy program is as follows:
a. The abolition of redundant positions must be
done in good faith.
b. Fair and reasonable criteria must be used in
ascertaining what positions are to be
declared redundant.
3. Retrenchment – This is reduction of personnel
by an employer to prevent or minimize
substantial business losses. There are 3 basic
requisites for a valid retrenchment, to wit:
a. The retrenchment is necessary to prevent
substantial losses.
b. Fair and reasonable criteria must be used in
ascertaining who would be dismissed and
who would be retained
c. The retrenchment must be resorted to as a
measure of last resort and after less drastic
means have been tried and found wanting or
insufficient.
4. Closing or cessation of operation of the
establishment
Note: The authorized causes for termination are not
attributable to the fault of the employee, but mainly
economic in character.
What are the procedural requirements to terminate
an employee for an authorized cause? The Labor Code
provides that “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
Department 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.
Note: Failure to comply with the notice requirement
will subject the employer to sanction in the nature of
indemnification, the amount of which will depend on the
facts of each case and the gravity of the omission
committed by the employer.
What is a lay-off?
Lay-off is the temporary separation from service of an
employee, as distinguished from dismissal which is a
permanent separation from service.
If lay-off is only temporary, what is its duration?
The Labor Code provides that 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 to his 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.
Note: If the lay-off exceeds 6 months, the relationship
of employer-employee automatically terminates.
Consequently, the affected employees are entitled to
separation pay, unless the failure of the employer to
resume operations was impelled by serious business
losses, in which case, the affected employees are not
entitled to separation pay.
If the suspension of operation is done in bad faith, the
employment relationship will be deemed uninterrupted.
Consequently, the affected employees will be enititled to
their wages during the period of suspension of
operations.
May an employee be dismissed on the ground that he
is suffering from a disease?
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 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.
Note: There should be a certification from a competent
public health authority that the disease is of such nature
or at such a stage that it cannot be cured within a period
of 6 months even with proper medical treatment.
Without this certificate, the termination of employment
is illegal.
Can employment be terminated by the employee
himself?
Yes and the resignation may be voluntary or involuntary.
Under the law, 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
(Voluntary resignation).
Note: For the resignation to take effect, it must be
accepted or approved by the employer. Resignation is
not deemed accepted if the employee was still required
to report for work and explain his unauthorized
absences.
As a general rule an employee who voluntarily resigns
from his employment is not entitled to separation pay
unless sanctioned by established company policy or
stipulated in the employment contract or CBA.
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 employee or any of the immediate
members of his family; and
4. Other causes analogous to any of the foregoing.
Note: these are considered constructive dismissal or
grounds for involuntary resignation.
What is abandonment of employment?
Abandonment of employment is constructive
resignation. It is the deliberate, unjustified refusal of an
employee to resume his work.
What are the elements of abandonment of
employment?
To constitute abandonment,
the following elements
must concur:
1. Absence without notice,
permission or justifiable
reason
2. Intent to sever the employment relationship.
Note: To establish abandonment of employment, a
notice to report for work should be sent to the last known
address of the employee. If the employee does not
report, it would be prudent to send a second notice to
report for work. If the employee does not report for
work despite receipt of the notices, it would already
indicate intent to abandon. Hence, the employee can be
declared to have abandoned his employment. If the
employee reports back to work he should be charged
with absence without leave and the corresponding
penalty, including dismissal should be meted out against
him.
What is retirement?
Retirement is the withdrawal from office, employment or
occupation, upon reaching a certain age or after
rendering a certain number of years of service. As to
when an employee can retire or be retired, will primarily
be determined by the retirement plan, CBA or
employment contract. If there is no retirement plan,
CBA or employment contract, the retirement of
employees will be governed by the provisions of the
Labor Code.
Who are covered by the retirement provisions of the
Labor Code?
The Labor Code provisions on retirement apply to all
employees who have rendered service for at least 5 years
regardless of their position, designation, status and
irrespective of the method by which their wages are
paid.
Who are not covered by the retirement provisions of
the Labor Code?
The following are not covered:
1. Employees who have not rendered service for at
least 5 years
2. Domestic helpers and persons in the personal
service of another.
3. Employees or retail establishments regularly
employing not more than 10 employees.
4. Employees of service establishments regularly
employing not more than 10 employees.
5. Employees of agricultural establishments or
operations regularly employing not more than 10
employees.
What are the types of Retirement?
Retirement may be:
 1. Optional (60 years old for ordinary employees;
50 years old for underground mining employees)
2. Compulsory (65 years old for ordinary
employees; 60 years old for underground mining
employees)

How much is the retirement pay?

The Labor Code provides: 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 employee’s
retirement benefits under any collective bargaining and other
agreements shall not be less than those provided therein.

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 or 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.

Unless the parties provide for broader inclusions, the term

‘one-half (1/2) month salary’ shall mean fifteen (15) days plus
one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive
leaves.