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Labor 1

Course Outline 2nd. Part

IV. Termination of Employment

A. Employer-employee relationship
1. Four-fold test
2. Probationary employment
3. Kinds of employment
a) Regular employment
(i) Reasonable connection rule
b) Project employment
(i) Indicators of project employment
c) Seasonal employment
d) Casual employment
e) Fixed term employment
(i) Requisites for validity
4. Job contracting and labor-only contracting
a) When is there “job contracting”?
b) When is there “labor-only contracting”?
c) Conditions that must concur in legitimate job contracting
d) Effects of finding that there is labor-only contracting

B. Termination of employment
1. Substantive due process
a) Just causes
(i) Serious misconduct or willful disobedience
(a) Requisites
(ii) Gross and habitual neglect of duties
(a) Requisites

(iii) Fraud or willful breach of trust (loss of trust and confidence)

(a) Requisites
(iv) Abandonment of employment; elements that must concur
(v) Termination of employment pursuant to a union security
(vi) Totality of infractions doctrine
b) Authorized causes
(i) Redundancy, retrenchment and closure
(a) Procedural steps required
(b) Requirements for valid retrenchment/redundancy
(c) Criteria in selecting employees for dismissal
d) Standards to be followed
(ii) Disease or illness
(a) Requisites
2. Procedural due process
a) Procedure to be observed in termination cases
b) Guiding principles in connection with the hearing requirements in
dismissal cases
c) Agabon doctrine
3. Reliefs for illegal dismissal
a) Reinstatement aspect
(i) Immediately executory
(a) Actual reinstatement
(ii) Payroll reinstatement
b) Separation pay in lieu of reinstatement
(i) Strained relation rule
c) Back wages
(i) Components of the amount of back wages
d) Constructive dismissal
e) Preventive suspension
f) Quitclaims
g) Termination of employment by employee

C. Retirement Pay Law

1. Coverage
2. Exclusions from coverage
3. Components of retirement pay
4. Retirement pay under R.A. 7641 vis-à-vis retirement benefits under SSS and
GSIS laws

V. Management Prerogative

A. Discipline

B. Transfer of employees

C. Productivity standard

D. Grant of bonus

E. Change of working hours

F. Marital discrimination

G. Post-employment ban

H. Limitations in its exercise

VI. Social Legislation

A. SSS Law (R.A. 8282)

1. Coverage
a) Exclusions from coverage
b) Benefits
c) Beneficiaries

B. GSIS Law (R.A. 8291)

1. Coverage
2. Exclusions from coverage
3. Benefits
4. Beneficiaries

C. Limited Portability Law (R.A. 7699)

D. Employee’s compensation – coverage and when compensable

VII. R. A. No. 8042 (Migrant and Overseas Filipino Act of 1985).

Jurisdiction – Employer-employee related cases transferred from POEA to Labor Arbiters:

Money claims arising from pre-termination of employment without a valid cause- entitles the OFW to reimbursement
of his placement fee with interest plus his salary for either the unexpired portion of the employment contract or for
three months for every year of the unexpired term, whichever is less.

Jurisdiction retained by POEA:

a) All cases which are administrative in character, involving or arising out of violations of rules and
regulations relating to licensing and registration of recruitment and employment agencies or entities;

b) Disciplinary actions and other special cases which are administrative in character involving
employers, principals, contracting partners and Filipino migrant workers.

Grounds: submission of false information or documents; unjustified refusal to continue his/her

application after signing an employment contract; commission of a felony punishable by Philippine laws
or by the laws of the host country; possession of prohibited drugs; embezzlement of company funds or
of moneys and properties of a fellow worker entrusted for delivery to kins or relatives in the Philippines;
unjust refusal to depart for the worksite after all employment and travel documents have been duly
approved by the appropriate government agency/ies; and violation/s of the laws and cultural practices of
the host country.

Appeal – from POEA to the Office of the Secretary, as part of its power of supervision and control over the attached
agency. (Eastern Mediterranean Maritime, et al., vs. Surio, et al., G. R. No. 154213, August 23, 2012).

Employment Conditions – Lex loci contractus – the law of the place where the contract is made.

Triple Eight Integrated Services vs. NLRC, 540 Phil. 65 (2006); Sameer Overseas Placement vs Cabiles, GR No.
170139, August 5, 2014, en banc.

Security of Tenure –

Employment at will – may be terminated by either party with or without cause if freely expressed in writing; sufficient
notice before effectivity.

Employee’s permanent or total disability –when so declared by the company-designated physician or in its absence,
upon lapse of 120- or 240- day treatment period while the employee’s disability continuous and the employee is
unable to engage in gainful employment during the period.

Seafarer’s death benefit – death need not have occurred during the term of employment.

Compensation and benefits for death – Fifty thousand US dollars and an additional amount of Seven thousand US
dollars each child under the age of twenty-one but not exceeding four (4) children. Section 20(A) of the 1996 POEA-
Seafarer’s death need not have occurred during the term of employment – C. F. Sharp Crew Management, Inc, vs.
Legal Heirs of Godofredo Repiso, etc., G. R. No. 190534, Feb. 10, 2016.

Invalid side-agreement - an agreement that diminishes the employee’s pay and benefits as contained in a POEA-
approved contract is void. (Chavez vs. Bonto-Perez, Rayala, et al. G. R. No. 109808, March 1, 1995).

Period to file seafarer’s claim – Art. 291 of Labor Code 3 yrs. Prevails over POEA-SEC (standard contract of
employment) which provides 1 year from seafarer’s return to point of hire.

Illegal Recruitment as Economic Sabotage – When committed by a syndicate- carried out by a group of three or more
persons conspiring and/or confederating with one another; or, when committed in large scale- committedagainst three
or more persons individually or as a group.

Jurisdiction – Regional Trial Court where the act of illegal recruitment was committed or where the offended party
actually resides at the time of the commission of the offense.

Prescription – Simple illegal recruitment – 5 years; Economic sabotage – 20 years.

Employer-Employee Relationship –

Street-hired cargadores – The cargadores are regular employees. (Caurdanetaan Piece Workers Union, vs.
Undersecretary Bienvenido Laguesma, and Corfarm Grains, Inc., G. R. No. 113542, February 24, 1998).

Workers in Movie Projects – Maraguinot and P. Enero vs. NLRC, et al., and Viva Films, G. R. No. 120969, January
22, 1998.

Prohibition Against Elimination or Diminution of Benefits –

Non-diminution of benefits already granted: (1) the grant of benefit or benefits is founded on a policy or has ripened
into a practice over a long period; (2) the practice is consistent and deliberate; (3) the practice is not due to error in
the construction or application of a doubtful question of law; and (4) the diminution or discontinuance is done
unilaterally by the employer.

Non-contributory retirement plan – Nestle Philippines, Inc., vs. NLRC, G. G. No. 91231, Feb. 4, 1991.

Wage Order compliance – Granting across-the-board salary increases to avoid salary distortion cannot be said to
have ripened into a company practice. Hence, if there is no salary distortion to cure, the previous across-the-board
method cannot be demanded as a legal obligation. (Pag-asa Steel Workers vs. CA, et al., G. R. No. 166647, March
31, 2006).