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A. Hours of work “primarily for the benefit of the employer and [its] business.”
1. Coverage/Exclusions
Employees in all establishments, whether operated The following shall be considered as compensable hours
for profit or not, are covered by the law on labor standards. worked:
The following are excluded from the coverage of the a. All time during which an employee is required to
law on labor standards: be on duty or to be at the employer’s premises or to
a. Government employees; be at a prescribed workplace; and
b. Managerial employees; b. All time during which an employee is suffered or
c. Other officers or members of a managerial staff; permitted to work.
d. Domestic servants and persons in the personal
service of another; 5. Overtime work, overtime pay
e. Workers paid by results; “Premium pay” refers to the additional
f. Non-agricultural field personnel; and compensation required by law for work performed within
g. Members of the family of the employer. eight (8) hours on non-working days, such as rest days and
regular and special holidays.
2. Normal hours of work “Overtime pay” refers to the additional
“Flexible work arrangements” refer to alternative compensation for work performed beyond eight (8) hours a
arrangements or schedules other than the traditional day. Every employee who is entitled to premium pay is
or standard work hours, workdays and workweek. likewise entitled to the benefit of overtime pay.
The effectivity and implementation of any of the flexible work
arrangements should be temporary in nature. General rule: The general rule remains that no employee may
be compelled to render overtime work against his will.
a) Compressed work week
“Compressed Workweek” or “CWW” refers to a Exceptions when employee may be compelled to render
situation where the normal workweek is reduced to less than overtime work: W2-PUP-COLLEGE
six (6) days but the total number of work-hours of 48 hours
per week remains. The normal workday is increased to more 1. When the country is at war or when any
than eight (8) hours but not to exceed twelve (12) hours, other national or local emergency has
without corresponding overtime premium. This concept can been declared by Congress or the Chief
be adjusted accordingly in cases where the normal workweek Executive;
of the firm is five (5) days. 2. When overtime work is necessary to avail of
favorable weather or environmental
The CWW scheme is undertaken as a result of an conditions where performance or quality of
express and voluntary agreement of majority of the covered work is dependent thereon.
employees or their duly authorized representatives. 3. When overtime work is necessary to
prevent loss of life or property or in case of
Unless there is a more favorable practice existing in imminent danger to public safety due to
the firm, work beyond eight (8) hours will not be actual or impending emergency in the
compensable by overtime premium provided the total locality caused by serious accident, fire,
number of hours worked per day shall not exceed twelve floods, typhoons, earthquake, epidemic or
(12) hours. In any case, any work performed beyond twelve other disasters or calamities;
(12) hours a day or forty-eight (48) hours a week shall be 4. When there is urgent work to be performed
subject to overtime pay. on machines, installations or equipment, or
in order to avoid serious loss or damage to
3. Meal break the employer or some other causes of
The workers who are required to work in 2 similar nature;
successive shifts should be paid 16hours and not 14, the two 5. When the work is necessary to prevent loss
hours for rest or mealtime breaks being included as or damage to perishable goods;
compensable working time. 6. When the completion or continuation of
work started before the 8th hour is
necessary to prevent serous obstruction or
4. Waiting time prejudice to the business or operations of
If waiting is an integral part of his work or the the employer;
employee is required or engaged by the employer to wait.
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6. Night work, Night shift differential 2. The teacher must have rendered 3 consecutive years
The law on nightwork applies not only to women but of service; and
to all persons, who shall be employed or permitted or 3. Such service must have been satisfactory
suffered to work at night, except those employed in
agriculture, stock raising, fishing, maritime transport and Casual Employee – the labor code provides
inland navigation, during a period of not less than seven (7) that any employee who has received at
consecutive hours, including the interval from midnight to least one year of service, whether such
five o'clock in the morning, to be determined by the DOLE service is continuous or broken, shall be
Secretary, after consulting the workers’ representatives/labor considered as a regular employee with
organizations and employers. respect to the activity to which he is
employed, and his employment shall
"Night worker" means any employed person whose continue while such activity actually exists
work covers the period from 10 o'clock in the evening to 6 8. Contract for piece of work
o'clock the following morning provided that the worker B. Wages
performs no less than seven (7) consecutive hours of work. 1. Wage vs. Salary
The term “wage” is used to characterize the
7. Part-time work compensation paid for manual skilled or unskilled labor.
“Part-time work” is “a single, regular or voluntary “Salary,” on the other hand, is used to describe the
form of employment with hours of work substantially shorter compensation for higher or superior level of employment.
than those considered as normal in the establishment.” A
“part time worker” is an employed person whose normal 2. Minimum wage defined, Minimum wage
hours of work are less than those of comparable full-time setting
workers. The minimum wage rates prescribed by law shall be
the basic cash wages without deduction therefrom of
The same protection afforded to full-time workers whatever benefits, supplements or allowances which the
with respect to security of tenure should also be extended to employees enjoy free of charge aside from the basic pay.
part-time workers. Where the employment contract is fixed or
for a definite period only as contemplated by law, part-time Minimum wage setting - Whenever conditions in the region
employees are likewise entitled to tenurial rights during the so warrant, the Regional Board shall investigate and study all
entire period of their fixed employment. In other words, they pertinent facts and based on the prescribed standards and
cannot be separated from work without just or authorized criteria, shall proceed to determine whether a Wage Order
cause. should be issued.
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(NWPC) within 10 calendar days from publication of 4. Commissions
such order. It shall be mandatory for the commission “Commission” is the recompense, compensation or
to decide such appeal within 60 calendar days from reward of an employee, agent, salesman, executor, trustee,
the filing thereof. receiver, factor, broker or bailee, when the same is calculated
Any wage order issued by the Regional Board may as a percentage on the amount of his transactions or on the
not be disturbed for a period of 12 months from its profit of the principal.
effectivity, and no petition for wage increase shall be
entertained within the said period except when 5. Deductions from wages
there are supervening conditions. General rule is that an employer, by himself or
through his representative, is prohibited from making any
What are the methods of fixing the minimum wage rates? deductions from the wages of his employees. The employer
There are two (2) methods, to wit: is not allowed to make unnecessary deductions without the
1. “Floor-Wage” method which involves the knowledge or authorization of the employees.
fixing of a determinate amount to be added
to the prevailing statutory minimum wage Are there exceptions to this rule? Ui-L2AMI-DCDW.
rates; and a) For union dues, in cases where the right of the
2. “Salary-Cap” or “Salary-Ceiling” method worker or his union to check-off has been recognized
where the wage adjustment is to be applied by the employer or authorized in writing by the
to employees receiving a certain individual worker concerned
denominated salary ceiling. b) In cases where the worker is insured with his
consent by the employer, and the deduction is to
The distinction between the two (2) methods is best recompense the employer for the amount paid by
shown by way of an illustration. Under the “Floor Wage him as premium on the insurance;
Method,” it would be sufficient if the Wage Order simply set c) In cases where the employer is authorized by law
P15.00 as the amount to be added to the prevailing statutory or regulations issued by the DOLE Secretary.
minimum wage rates; while in the “Salary-Ceiling Method,” it d) Deductions for loss or damage;
would be sufficient if the Wage Order states a specific salary, e) Deductions made for agency fees from non-union
such as P250.00, and only those earning below it shall be members who accept the benefits under the CBA
entitled to the wage increase. negotiated by the bargaining union. This form of
deduction does not require the written
3. Minimum wage of workers paid by results authorization of the non-bargaining union member
a) Workers paid by results – They are concerned;
workers who are engaged on f) Deductions for value of meal and other facilities;
pakyao, piecework, task and other g) Deductions for premiums for SSS, PhilHealth,
non-time work. They are so called employees’ compensation and Pag-IBIG;
because they are paid not on the h) Withholding of wages because of the employee’s
basis of the time spent on their debt to the employer which is already due;
work but according to the quantity, i) Deductions made pursuant to a court judgment
quality or kind of job and the against the worker under circumstances where the
consequent results thereof. wages may be the subject of attachment or
(Supervised or Unsupervised execution but only for debts incurred for food,
workers) clothing, shelter and medical attendance;
Because of the unique manner by which the work is j) Withholding tax mandated under the National
compensated as distinguished from the compensation Internal Revenue Code (NIRC);
calculated in the basis of time, it is subject to more k) When deductions from wages are ordered by the
regulations in order to ensure payment of fair and reasonable court;
wage rates basically through 2 modes:
1) Time and motion study; or 6. Non-diminution of benefits
2) As may be fixed through consultation with workers’ The 2014 case of Wesleyan University-Philippines v.
and employers’ organizations. Wesleyan University-Philippines Faculty and Staf
b) Apprentices – 75% of the SMW Association, succinctly pointed out that the Non-Diminution
c) Learners – 75% of the SMW Rule found in Article 100 of the Labor Code explicitly prohibits
d) Persons with disability – 100% of employers from eliminating or reducing the benefits received
the SMW by their employees. This rule, however, applies only if the
benefit is based on any of the following:
1) An express policy;
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2) A written contract; or upon the realization of profits, the bonus is not
3) A company practice. demandable and enforceable.
The test or rationale of this rule on long practice Legal Requirements that must be complied with before
requires an indubitable showing that the employer facilities may be deducted from wages:
agreed to continue giving the benefits knowing fully 1) Proof that such facilities are customarily furnished by
well that said employees are not covered by the law the trade;
requiring payment thereof. 2) The provision of deductible facilities is voluntary
accepted in writing by the employee; and
2) If it is granted as an additional compensation which 3) The facilities are charged at fair and reasonable value
the employer agreed to give without any condition
such as success of business or more efficient or more 8. Wage Distortion/Rectification
productive operation, hence, it is deemed part of “Wage distortion” contemplates a situation where an
wage or salary. increase in prescribed wage rates results in either of the
3) When considered as part of the compensation and following:
therefore demandable and enforceable, the amount 1) Elimination of the quantitative differences in the
is usually fixed. If the amount thereof is dependent rates of wages or salaries; or
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2) Severe contraction of intentional quantitative Available only for the first 4 deliveries and
differences in wage or salary rates between and may be availed of before or during the
among employee groups in an establishment as to delivery, provided that the total number of
effectively obliterate the distinctions embodied in days should not exceed 7 calendar days for
such wage structure based on the following criteria: each delivery. {not convertible to cash}
a. Skills; 4. Parental Leave - seven (7) working days
b. Length of service; or every year to a solo parent who has
c. Other logical bases of differentiation. rendered service of at least one (1) year, to
enable him/her to perform parental duties
Elements of Wage Distortion: HS-Elims-Existence and responsibilities where his/her physical
1) An existing hierarchy of positions with corresponding presence is required. This leave shall be
salary rates; non-cumulative. It bears noting that this
2) A significant change in the salary rate of a lower pay leave privilege is an additional leave benefit
class without a concomitant increase in the salary which is separate and distinct from any
rate of a higher one; other leave benefits provided under existing
3) The elimination of the distinction between the two laws or agreements. {Not convertible to
levels; and cash}
4) The existence of the distortion in the same region of 5. Leave for Victims of Violence against
the country. Women and Children - It is for a total of ten
(10) days of paid leave of absence, in
9. Divisor to determine daily rate addition to other paid leaves under the law.
It is extendible when the necessity arises as
C. Rest Periods specified in the protection order. Its
1. Weekly rest day – a rest day period of not purpose is to enable the woman employee
less than twenty-four (24) consecutive to attend to the medical and legal concerns
hours after every six (6) consecutive relative to said law. This leave is not
normal work days. {determined by the convertible to cash.
employer, exception: religious grounds} 6. Special leave benefit for women - any
2. Emergency rest day work – W - PUP female employee in the public and private
D. Holiday pay/Premium pay sector regardless of age and civil status shall
1. Coverage, exclusions – GMOD-RF-RFC be entitled to a special leave of two (2)
2. Teachers, piece workers, takay, seasonal months with full pay based on her gross
workers, seafarers –if supervised, the monthly compensation subject to existing
employee is entitled to holiday pay, if laws, rules and regulations due to surgery
Unsupervised, he is not. caused by gynecological disorders provided
E. Leaves that she has rendered at least 6 months
1. Service incentive Leave – at least one (1) continuous aggregate employment service
year of service is entitled to incentive leave for the last 12 months prior to surgery. This
of five (5) days with pay. Exclusions: GMOD- special leave shall be non-cumulative and
RF-RFC {SIL is convertible to cash} non-convertible to cash.
2. Maternity Leave – married or unmarried to F. Service charge - Percentage of sharing- All service
undergo or recuperate from childbirth, charges collected by covered employers are required
miscarriage or complete abortion. Daily to be distributed at the following rates:
maternity benefit of 100% of her average 1. 85% to be distributed equally
daily salary credit for: among the covered employees; and
60 days – normal delivery 2. 15% to management to answer
78 days – Ceasarian delivery for losses and breakages and
(only for the first four(4) deliveries or distribution to employees receiving more
miscarriages) than P2, 000.00 a month, at the discretion
3. Paternity Leave – entitled to seven (7) of the management
calendar days of leave benefits with pay on
the condition that his spouse(legal) has G. Thirteenth month pay - not be less than one-twelfth
delivered a child or suffered miscarriage for (1/12) of the total basic salary earned by an
purposes of enabling him to effectively lend employee within a calendar year. To be entitled to
support to his wife in her period of recovery the 13th month pay benefit, it is imposed as a
and/or nursing of the newly-born child. minimum service requirement that the employee
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should have worked for at least one (1) month Toyota, however, makes a distinction when the grounds cited
during a calendar year. are the analogous causes for termination under Article
282(e), like inefficiency, incompetence, ineptitude, poor
Covered employees: Only rank-and-file employees, performance and others. It declared that in these cases, the
regardless of their designation or employment status and NLRC or the courts may opt to grant separation pay anchored:
irrespective of the method by which their wages are paid, are a. on social justice
entitled to the 13th month pay benefit. Managerial b. in consideration of the length of service of the
employees are not entitled to 13th month pay. employee,
c. the amount involved
Excluded: d. whether the act is the first offense
The following employers are not covered by the 13th month e. the performance of the employee
pay law: f. And the like, using the guideposts enunciated in
1) The government and any of its political subdivisions, PLDT on the propriety of the award of separation
including government-owned and controlled pay.
corporations, except those corporations operating
essentially as private subsidiaries of the government I. Retirement pay
2) Employers already paying their employees 13th month a. Eligibility – P-PUDGE
pay or more in a calendar year or its equivalent at the 1) All employees in the private sector,
time of the issuance of the Revised Guidelines. regardless of their position,
3) Employers of those who are paid on purely designation or status and
commission, boundary, or task basis, and those who irrespective of the method by
are paid a fixed amount for performing a specific work, which their wages are paid;
irrespective of the time consumed in the performance 2) Part-time employees;
thereof, except where the workers are paid on piece- 3) Underground mine workers;
rate basis, in which case, the employer shall be covered 4) Domestic helpers or persons in the
by the Revised Guidelines insofar as such workers are personal service of another;
concerned. Workers paid on piece-rate basis shall 5) Employees of government-owned
refer to those who are paid a standard amount for and/or controlled corporations
every piece or unit of work produced that is more or organized under the Corporation
less regularly replicated without regard to the time Code(without original charters).
spent in producing the same. 6) Employees of service and other job
contractors.
H. Separation pay Excluded:
The Labor Code prescribes the payment of 1) Employees of the national government and its
separation pay only in the following four (4) situations: political subdivisions, including government-owned
When termination is due to authorized causes: and/or controlled corporations, if they are covered
(1) installation of labor-saving devices; by the Civil Service Law and its regulations.
(2) redundancy; 2) Employees of retail, service and agricultural
(3) retrenchment; or establishments or operations regularly employing
(4) closing or cessation of business operations; and not more than ten (10) employees.
(5) disease
In accordance with jurisprudence, the following separation A. Under Article 287.
pay may be cited: This article provides for two (2) types of retirement:
(1) Separation pay in lieu of reinstatement; and
(2) Separation pay as financial assistance in cases where the (1) Optional retirement upon reaching the age of sixty (60)
dismissal was held valid and legal but the employee is given years.
financial assistance by reason of long years of service, (2) Compulsory retirement upon reaching the age of sixty-five
unblemished record, substantial justice, etc. (65) years.
It is the employee who exercises the option under
The Toyota doctrine. No. 1 above. Five (5) years is the minimum years of service
Under this doctrine, all grounds in Article 282 of the Labor that must be rendered by the employee before he can avail of
Code, except analogous causes, would not merit payment of the retirement benefits upon reaching optional or compulsory
financial assistance. retirement age under Article 287.
B. Under retirement plan.
Exception to Toyota doctrine: When termination is based on The optional and compulsory retirement schemes
analogous causes. provided under Article 287 come into play only in the absence
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of a retirement plan or agreement setting forth other forms of retirement, divided by the number of actual
optional or compulsory retirement schemes. Thus, if there is a working days in that particular period.
retirement plan or agreement in an establishment providing d. Retirement benefits of part-time workers -
for an earlier or older age of retirement (but not beyond 65 Applying the principles under Article 287, as
which has been declared the compulsory retirement age), the amended, the components of retirement
same shall be controlling. benefits of part-time workers may also be
C. Retirement at an earlier age or after rendering certain computed at least in proportion to the
period of service. salary and related benefits due them.
Based on Article 287 the employers and employees a. Taxability – in order to be exempt, the
are free to agree and stipulate on the retirement age, either following are the requirements:
in a CBA or employment contract (voluntary agreed upon,
mutual agreement). It is only in the absence of such 1) a reasonable private benefit plan maintained by the
agreement that the retirement age shall be fixed by law, that employer;
is, in accordance with the optional and compulsory 2) The retiring official or employee has been in the
retirement age prescribed under Article 287. service of the same employer for at least ten (10)
years;
What is the retirement age of underground mine workers? 3) He/she is not less than fifty (50) years of age at the
The optional retirement age of underground mine workers is time of his/her retirement; and
50 years of age; while the compulsory retirement age is 60 4) The benefits shall be availed of by an official or
years old. employee only once.
J. Women workers
What is the minimum number of years of service required of a. Provisions against discrimination
underground mine workers? a) Payment of a lesser compensation, including wage,
Minimum years of service is also 5 years. salary or other form of remuneration and fringe
benefits, to a female employee as against a male
b. Amount – In the absence of a retirement employee, for work of equal value; and
plan or agreement providing for retirement b) Favoring a male employee over a female employee
benefits of employees in the establishment, with respect to promotion, training opportunities,
an employee, upon reaching the optional or study and scholarship grants solely on account of
compulsory retirement age specified in their sexes.
Article 287, shall be entitled to retirement b. Stipulation against marriage
pay equivalent to at least one-half (½) c. Prohibited acts
month salary for every year of service, a d. Anti-sexual harassment Act
fraction of at least six (6) months being K. Employment of minors
considered as one (1) whole year. L. Househelpers
“One-half month salary” shall include all of the following: M. Employment of Homeworkers
(1) Fifteen (15) days salary of the employee based N. Apprentices and Learners
on his latest salary rate. O. Persons with disability
(2) The cash equivalent of five (5) days of service a. Definition
incentive leave; b. Rights of persons with disability
(3) One-twelfth (1/12) of the 13th month pay due the c. Prohibition on discrimination against
employee; and persons with disability
(4) All other benefits that the employer and d. Incentives for employers
employee may agree upon that should be included in
the computation of the employee’s retirement pay.
“One-half (½) month salary” means 22.5 days arrived at after
adding 15 days plus 2.5 days representing one-twelfth [1/12]
of the 13th month pay plus 5 days of service incentive leave.
c. Retirement benefits of workers paid by
results – For covered workers who are paid
by results and do not have a fixed monthly
rate, the basis for the determination of the
salary for fifteen (15) days shall be their
average daily salary (ADS). The ADS is the TERMINATION OF EMPLOYMENT
average salary for the last twelve (12) A. Employer-Employee relationship
months reckoned from the date of their 1. Four-fold test – S-P-D-C
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1. Selection and engagement of the employee; of service, whether such service is continuous or broken, with
2. Payment of wages or salaries; respect to the activity in which he is employed and his
3. Exercise of the power of dismissal; or employment shall continue while such activity exists.
4. Exercise of the power to control the employee’s 3. By probationary employment. - The employment is
conduct. considered regular when the employee is allowed to work
after a probationary period.
The test of control is the controlling test which means that
the employer controls or has reserved the right to control the (b) Project employees referring to those “whose employment
employee not only as the result of the work to be done but has been fixed for a specific project or undertaking, the
also as to the means and methods by which the same is to be completion or termination of which has been determined at
accomplished. the time of the engagement of the employee”;
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The two (2) requisites or criteria for the validity of a fixed- such job, work or service is to be performed or completed
term contract of employment are as follows: within or outside the premises of the principal; OR
1. The fixed period of employment was knowingly and
voluntarily agreed upon by the parties, without any (b) The contractor does not exercise the right of control over
vices of consent; the performance of the work of the employee.
2. It satisfactorily appears that the employer and
employee dealt with each other on more or less NOTE: Even if only one of the two (2) elements above is
equal terms with no moral dominance whatever present, there is labor-only contracting.
being exercised by the former on the latter.
Effects:
Fixed-term employment is the only exception to the rule 1. The labor-only contractor will be treated as the agent
that one becomes regular if he is made to perform activities or intermediary of the principal.
directly related to the principal business of the employer 2. The principal will become the employer as if it
(Regularity by virtue of nature of work) directly employed the workers. It will be responsible
to them for all their entitlements and benefits under
3. Job Contracting labor laws.
a. Trilateral relationship in job contracting 3. The principal and the labor-only contractor will be
In legitimate job contracting, there are three (3) parties solidarily treated as the direct employer.
involved, to wit: 4. The employees will become employees of the
1. The principal who decides to farm out a job, work or principal.
service to a contractor;
2. The contractor who has the capacity to c. Distinctions between legitimate job
independently undertake the performance of the contracting and labor only contracting
job, work or service; and
3. The contractual workers engaged by the contractor 1. In legitimate job contracting, no ER-EE relationship
to accomplish the job, work or service. exists between the contractual employees of the
contractor and the principal; while in labor-only
Requisites of legitimate job contracting: contracting, ER-EE relationship is created by law;
1) It must be registered with the DOLE 2. In the former, the principal is considered as an
2) it must have a distinct and independent business indirect employer; while in the latter, the principal is
and free from control and direction of the principal considered as the direct employer;
in all matters connected with the performance of 3. In the former, the joint and several obligation of the
the work except as to the results thereof; principal and the legitimate job contractor is only for
3) The contractor has substantial capital and/or a limited purpose, that is, to ensure that the
investment in the form of tools, equipment, employees are paid their wages. while in the latter,
machineries, work premises, and other materials the principal becomes jointly and severally or
which are necessary in the conduct of the solidarily liable with the labor-only contractor to the
business;and latter’s employees.
4) The Service Agreement between principal and
contractor should ensure compliance with all the B. Dismissal from Employment
rights and benefits of workers.
What is meant by two-fold due process requirement?
Absence of any of the foregoing requisites makes it a labor- Dismissal of employees requires the observance of the two-
only contracting arrangement. fold due process requisites, namely:
b. Effects of labor only contracting 1. Substantive aspect which means that the dismissal must be
for any of the (1) just or (2) authorized causes
When is there labor-only contracting? 2. Procedural aspect which means that the employee must be
accorded due process, the elements of which are notice and
(a) The contractor does not have substantial capital or the opportunity to be heard and to defend himself.
investments in the form of tools, equipment, machineries,
work premises, among others, and the employees recruited What is the distinction between JUST CAUSES and
and placed are performing activities which are usually AUTHORIZED CAUSES?
necessary or desirable to the operation of the company, or A dismissal based on a just cause means that the
directly related to the main business of the principal within employee has committed a wrongful act or omission; while a
a definite or predetermined period, regardless of whether dismissal based on an authorized cause means that there
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exists a ground which the law itself allows or authorizes to be 2. There must have been a clear intention on the part
invoked to justify the termination of an employee even if he of the employee to sever the employer-employee
has not committed any wrongful act or omission such as: relationship manifested by some overt act.
Installation of labor-saving devices;
Redundancy; c) Fraud or willful breach by the employee of the trust
Retrenchment; reposed in him by his employer or duly authorized
Closure or cessation of business operations or representative;
Disease
Fraud - The following are the requisites of this
1. Just Causes ground:
1. The employee has committed an intentional
a) Serious misconduct or willful disobedience by the deception and used dishonest methods for
employee of the lawful orders of his employer or personal gain or to damage the employer;
representative; and
2. The fraud is work-related and rendered him
For misconduct or improper behavior to be a just unfit to work for his employer.
cause for dismissal, the following requisites must For the doctrine of loss of trust and confidence to
concur: apply, the following requisites must be satisfied:
1) It must be serious; and 1. The employee holds a position of trust and
2) It must relate to the performance of the confidence;
employee’s duties; and 2. There exists an act justifying the loss of trust
3) It must show that he has become unfit to and confidence, which means that the act
continue working for the employer. that betrays the employer’s trust must be
All the above three (3) requisites must concur. real, i.e., founded on clearly established
facts;
One of the fundamental duties of an employee is to 3. The employee’s breach of the trust must be
obey all reasonable rules, orders and instructions of willful, i.e., it was done intentionally,
the employer. In order to validly invoke this ground, knowingly and purposely, without justifiable
the following requisites must be complied with, to excuse; and
wit: 4. The act must be in relation to his work
1) The employee’s assailed conduct must have which would render him unfit to perform it.
been willful or intentional, the willfulness
being characterized by a wrongful and d) Commission of a crime or offense by the employee
perverse attitude; and against the person of his employer or any immediate
2) The order violated must be based on a member of his family or his duly authorized
reasonable and lawful company rule, representatives; and
regulation or policy and made known to the
employee and must pertain to the duties for The following are the requisites for the valid
which he has been engaged to discharge invocation of this ground:
1. A crime or offense was committed by the
b) Gross and habitual neglect by the employee of his employee;
duties; 2. It was committed against any of the
The following are the requisites: following persons:
1) There must be negligence which is gross (a) His employer;
and/or habitual in character; and (b) Any immediate member of his
2) It must be work-related as would make him employer’s family; or
unfit to work for his employer. (c) His employer’s duly authorized
Abandonment is a form of neglect of duty; hence, a representative.
just cause for termination of employment. e) Union officers who knowingly participate in an illegal
strike
To constitute abandonment, two (2) elements must concur, f) Any employee, union officer or ordinary member
namely: who knowingly participates in the commission of
1. The employee must have failed to report for work or illegal acts during a strike
must have been absent without valid or justifiable g) where strikers who violate orders, prohibitions
reason; and and/or injunctions as are issued by the DOLE
Secretary or the NLRC
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h) where violation of the union security agreement in 5. Fair and reasonable criteria in ascertaining what
the CBA positions are to be affected by the termination
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(4) When similar circumstances justify it. Under this article, an illegally dismissed employee is entitled
to the following reliefs:
Are the twin-notice requirement and hearing (1) Reinstatement without loss of seniority rights and
applicable to authorized cause termination? other privileges;
No. Due process in authorized cause termination is deemed Reinstatement is self-executory or immediately
complied with upon the separate and simultaneous service of executory only if it is ordered by the Labor Arbiter. This means
a written notice of the intended termination to both: that the employee ordered reinstated need not file any
(1) the employee to be terminated; and motion for the issuance of writ of execution to enforce
(2) the appropriate DOLE Regional Office, at least reinstatement. The employer, in fact, is required to manifest
one (1) month before the intended date of the termination within 10 days from his receipt of the order of reinstatement
specifying the ground/s therefor and the undertaking to pay which of the two (2) options he is taking:
the separation pay required under Article 283 of the Labor (1) To reinstate the employee to his former position
Code. For obvious reason, hearing is not required. or to a substantially equivalent position; or
(2) To reinstate him in the payroll, which means the
Are the twin-notice requirement and hearing employee need not report for work but only for the
applicable to an abandonment case which is a just purpose of getting his wage.
cause to terminate employment? There is no way the employer can disregard the reinstatement
No. Although considered as a just cause to terminate order. Posting of a bond does not stay the execution of
employment, the due process requirement is different. immediate reinstatement.
No hearing is required (since the employee has already
abandoned his job) but the following notices should be Are there instances where writ of execution of Labor
complied with: Arbiter’s reinstatement order is still required?
1) First notice asking the employee to explain why he Yes, under the 2011 NLRC Rules of Procedure, there
should not be declared as having abandoned his job; and are two (2) instances when a writ of execution should still be
2) Second notice informing him of the employer’s issued immediately by the Labor Arbiter to implement his
decision to dismiss him on the ground of abandonment. order of reinstatement, even pending appeal, viz.:
(1) When the employer disobeys the Rules-
What are the instances where hearing is not required? prescribed directive to submit a report of
Hearing is not required in the following cases: compliance within ten (10) calendar days from
1. Termination of project, seasonal, casual or fixed-term receipt of the decision; or
employment. (2) When the employer refuses to reinstate the
2. Termination of probationary employment on the ground dismissed employee.
of failure of the probationary employee to qualify as a The Labor Arbiter shall motu proprio issue a corresponding
regular employee in accordance with reasonable standards writ to satisfy the reinstatement wages as they accrue until
made known to him at the start of the employment. actual reinstatement or reversal of the order of
3. Termination due to abandonment of work. reinstatement. The employee need not file a motion for the
4. Termination due to authorized causes issuance of the writ of execution since the Labor Arbiter shall
5. Termination due to disease under Article 284. thereafter motu proprio issue the writ. Employer may be cited
6. Termination by the employee (resignation) for contempt for his refusal to comply with the order of
7. Termination after 6 months of bona-fide suspension of reinstatement. Employer is liable to pay the salaries for the
operation under Article 286. For purposes of satisfying due period that the employee was ordered reinstated pending
process, what is required is simply that the notices provided appeal even if his dismissal is later finally found to be legal on
under Article 283 be served to both the affected employees appeal.
and the DOLE at least one (1) month before the termination (2) Full backwages, inclusive of allowances; and
becomes effective. In 1996, the Supreme Court changed the rule on the
8. Termination due to retirement under Article 287. reckoning of backwages. It announced a new doctrine in the
9. Termination due to closure or stoppage of work by case of Bustamante v. NLRC, which is now known as the
government authorities when non-compliance with the law Bustamante doctrine. Under this rule, the term “full
or implementing rules and regulations poses grave and backwages” should mean exactly that, i.e., without deducting
imminent danger to the health and safety of workers in the from backwages the earnings derived elsewhere by the
workplace. concerned employee during the period of his illegal dismissal.
10. Termination of employee who has admitted his guilt for
the offense charged. When is the award of backwages limited?
(1) When the dismissal is deemed too harsh a
C. Reliefs for illegal dismissal penalty;
(2) When the employer acted in good faith; or
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(3) Where there is no evidence that the employer company premises during the investigation poses a
dismissed the employee. serious and imminent threat to the life or property
Thus, the backwages will not be granted in full but limited to of the employer or of the employee’s co-workers.
1 year, 2 years or 5 years. Without this threat, preventive suspension is not
proper.
(3) Other benefits or their monetary equivalent.
During the 30-day preventive suspension, the worker
The following reliefs that are awarded in illegal is not entitled to his wages and other benefits.
dismissal cases are missing in Article 279: However, if the employer decides, for a justifiable
reason, to extend the period of preventive
(1) Award of separation pay in lieu of reinstatement - The suspension beyond said 30-day period, he is
amount equivalent to at least one (1) month salary or to one obligated to pay the wages and other benefits due
(1) month salary for every year of service, whichever is higher, the worker during said period of extension. In such a
a fraction of at least six (6) months being considered as one case, the worker is not bound to reimburse the
whole year and the allowances that the employee has been amount paid to him during the extension if the
receiving on a regular basis. employer decides to dismiss him after the
completion of the investigation.
Separation pay, as a substitute remedy, is only proper Extension of period must be justified. During the 30-
for reinstatement but not for backwages. This remedy is not day period of preventive suspension, the employer is
found in the Labor Code but is granted in case reinstatement expected to conduct and finish the investigation of
is no longer possible or feasible, such as when any of the the employee’s administrative case. The period of
following circumstances exists: thirty (30) days may only be extended if the
(1) Where the continued relationship between the employer failed to complete the hearing or
employer and the employee is no longer viable due investigation within said period due to justifiable
to the strained relations and antagonism between grounds. No extension thereof can be made based
them (Doctrine of Strained Relations). on whimsical, capricious or unreasonable grounds.
(2) When reinstatement proves impossible, Preventive suspension lasting longer than 30 days,
impracticable, not feasible or unwarranted for varied without the benefit of valid extension, amounts to
reasons and thus hardly in the best interest of the constructive dismissal.
parties Indefinite preventive suspension amounts to
(3) Where the employee decides not to be reinstated constructive dismissal.
as when he does not pray for reinstatement in his
complaint or position paper but asked for separation E. Constructive dismissal
pay instead. Constructive dismissal contemplates any of the following
(4) When reinstatement is rendered moot and situations:
academic due to supervening events 1) An involuntary resignation resorted to when
(5) To prevent further delay in the execution of the continued employment is rendered impossible, unreasonable
decision to the prejudice of private respondent. or unlikely;
2) A demotion in rank and/or a diminution in pay; or
(2) Award of penalty in the form of nominal damages in case 3) A clear discrimination, insensibility or disdain
of termination due to just or authorized cause but by an employer which becomes unbearable to the
without observance of procedural due process. employee that it could foreclose any choice by him
(3) Reliefs to illegally dismissed employee whose employment except to forego his continued employment.
is for a fixed period. The proper relief is only the payment of
the employee’s salaries corresponding to the unexpired What is the test of constructive dismissal?
portion of the employment contract. The test of constructive dismissal is whether a reasonable
(4) Award of damages and attorney’s fees. person in the employee’s position would have felt compelled
(5) Award of financial assistance in cases where the to give up his position under the circumstances. It is an act
employee’s dismissal is declared legal but because of long amounting to dismissal but made to appear as if it were not.
years of service, and other considerations, financial assistance In fact, the employee who is constructively dismissed may be
is awarded. allowed to keep on coming to work. Constructive dismissal is,
(6) Imposition of legal interest on separation pay, backwages therefore, a dismissal in disguise.
and other monetary awards.
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