TERMINATION OF EMPLOYMENT

General Coverage
All establishments or undertaking, whether for profit or not, including educational, medical,
charitable and religious institutions and organizations, in cases of regular employment.

Exception: the government and its political subdivisions, including GOCCs

Security of tenure

LC294. 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
equivalent computed from the time his compensation was withheld from him up to the time of
his actual reinstatement.

Note: LC294 v Constitution

ESPINA, ET AL. V CA
While petitioners were only probationary employees who do not enjoy permanent status,
nonetheless, they were still entitled to the constitutional protection of security of tenure. As may
be gleaned in the Art. 281 of the LC, their employment may only be terminated for a valid and
just cause or for failing to qualify as a regular employee in accordance with the reasonable
standards made known to them by the employer at the time of engagement and after being
accorded due process.

Management Prerogative: Limitations

IMASEN PHIL MFG. CORP. V ALCON

In protecting the rights of the workers, the law does not authorize the oppression or self-
destruction of the employer. The Constitutional commitment to the policy of social justice cannot
be understood to mean that every labor dispute shall automatically be decided in favor of labor.
The Constitutional and legal protection equally recognize the employer’s right and prerogative
to manage its operation according to reasonable standards and norms of fair play. Accordingly,
except as limited by special law, an employer is free to regulate, according to his own judgment
and discretion, all aspects of employment.

As a general proposition, an employer has free reign over every aspect of its business, including
the dismissal of his employees as long as the exercise of its management prerogative is done
reasonably, in good faith, and in a manner not otherwise intended to defeat or circumvent the
rights of the workers.
SUGUE V TRIUMPH INTERNATIONAL (PHILS.) INC.
The Act of management in reorganizing the sales department in order to achieve its objectives is
a legitimate exercise of its management prerogatives, barring any showing of bad faith which is
absent in the instant case. Indeed, labor laws discourage interfering in employer’s judgments
concerning the conduct of their business. The law must protect not only the welfare of
employees, but also the right of employers.

REQUISITED FOR LAWFUL DISMISSAL: Concurrence of substantive and procedural due process

SUBSTANTIVE DUE PROCESS: mandates that an employee can only be dismissed on just or
authorized causes

PROCEDURAL DUE PROCESS: requires that an employee can only be dismissed after being given
an opportunity to be heard

Compliance with both substantial and procedural due process is necessary.

COCA-COLA BOTTLERS V GARCIA

In dismissing an employee, the employer has the burden of proving that the dismissed worker
has been served TWO notices:
1) the first to inform the employee of the particular act or omissions for which the employer
seeks his dismissal, and
2) the second to inform the employee of his employer’s decision to terminate him.

The first notice must state that the employer seeks dismissal for the act or omission charged
against the employee; otherwise, the notice does not comply with the rules.

Coca-Cola failed to satisfy the two-notice requirement. They argue that the purpose of the notice
requirement was achieved when they sent several notices to Garcia’s last known address. While
they presented the envelopes of the alleged notices sent to the last known address, the contents
thereof were not offered in evidence. Thus, the records are wanting of proof that Garcia was
properly apprised of the charges against her and was given an opportunity to explain her side, as
petitioner maintains. Evidently, it is clear that Garcia’s dismissal was effected without the notice
required by law.

GUIDE IN DISPOSITION OF LABOR DISPUTES

MANSION PRINTING CERNTER V BITARA, JR.

The termination of employment must be based on a just or authorized cause of dismissal and the
dismissal must be effected after due notice and hearing.

On the substantive aspect, in Valiao, we defined gross negligence as, “want of care in the
performance of one’s duties” and habitual neglect as “repeated failure to perform one’s duties
for a period of time, depending upon the circumstance.” Bitara’s last absences on 11, 13, 14, 15
and 16 March 2000 were undertaken without even notice/permission from management. These
attendance delinquencies may be characterized as habitual and are sufficient justifications to
terminate the complainant’s employment.

We cannot simply tolerate injustice to employers of only to protect the welfare of undeserving
employees.

Bitara claims that he was denied due process when the company failed to observe the two-notice
rule as the Notice of Explanation and Notice of Termination were never served upon him.
However, in Bughaw v Treasure Island Industrial Corporation, this Court, in verifying the veracity
of the allegation that respondent refused to receive the Notice of Termination, essentially looked
for the following:
1. affidavit of service stating the reason for failure to serve the notice upon the recipient;
and
2. notation to that effect, which shall be written on the notice itself.

In the case at bar, Mansion Printing, through its GM, did both. First, the notices indicated the
notation that Bitara “ refused to sign” together with the corresponding dates of service. Second,
an Affidavit executed by the Mansion Printing GM that 1) he is the GM; 2) that he personally
served each notice upon Bitara. Bitara refused to acknowledge receipt thereof. We are, thus,
convinced that the notices have been validly served.

PROCEDURAL AND SUBSTANTIVE ISSUES

Note: cause and procedure of dismissal are important but do not have the same legal effect.

LACK OF VALID CAUSE (SUBSTANTIVE)

- makes the dismissal illegal and invalid
- this entitles the employee to certain reliefs (e.g. reinstatement)

LACK OF PROPER PROCEDURE (PROCEDURAL)

- does not invalidate the dismissal but employee becomes liable for violating the
employee’s right to due process

ANG V SAN JOAQUIN, JR.

Despite Ang’s failure to attach certified copies of the assailed CA decision in his petition to the
SC, the Court opted to forego the matter of procedural errors. Due to the nature of the labor
cases, the nature of the alleged procedural infirmity cannot prod the Court to dismiss the petition
outright without first considering the merits.
NORMAL CONSEQUENCES OF ILLEGALITY OF DISMISSAL

Look at: LC294. Security of Tenure

The normal consequences of illegal dismissal are:

1. reinstatement without loss of seniority rights and payment of backwages computed from
the time compensation was withheld up to the date of actual reinstatement; or
2. where reinstatement is no longer viable as an option, separation pay equivalent to one
month salary for every year of service should be awarded as an alternative. The payment
of separation pay is in addition to payment of backwages. (Golden Ace Buikders v Talde)

DOCTRINE OF STRAINED RELATIONS

- the payment of separation pay is considered an acceptable alternative to reinstatement
when the latter option is no longer desirable or viable
- on one hand, such payment liberates the employee from what could be a highly
oppressive work environment
- on the other hand, it releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.
- Strained relations must be demonstrated as a fact to be adequately supported by
substantial evidence

EMPLOYEE’S BURDEN OF PROOF

LC 292. The burden of proving that the termination was for a valid or authorized cause shall rest
on the employer.

- Failure to show that a dismissal is for just and valid cause necessarily means that it was
not justified and therefore, was illegal
- The employer must affirmatively show by substantial evidence that the dismissal was for
a just cause

SUBSTANTIAL EVIDENCE- such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion

EMPLOYEE MUST FIRST ESTABLISH FACT OF DISMISSAL

ILADAN V LA SUERTE INTL MANPOWER AGENCY INC.

In illegal dismissal cases, the employer has the burden of proving that the employee’s dismissal
was legal. However to discharge the burden, the employee must first prove, by substantial
evidence, that he had been dismissed from employment. Iladan maintains that she was
threatened and coerced by respondents to write the resignation letter, to accept the financial
assistance and to sign the waiver and the settlement. Consequently, she insists that her act of
her resigning was involuntary. The Court is not convinced as we find no proof of Iladan’s
allegations. It is a settled jurisprudence that it is incumbent upon an employee to prove that his
resignation is not voluntary. However, Iladan did not adduce any competent evidence to prove
that respondents used force and threat.

MEASURE OF PENALTY

Rule : Penalty must be commensurate to the offense

Note: a dismissal with a valid cause and which afforded the employee due process may still be
questioned and nullified if the penalty itself is not appropriate

MONTELLANA V LA CONSOLACION COLLEGE MANILA

Even on the assumption that there was willful disobedience, still, the Court finds that the penalty
of dismissal too harsh. It bears to stress that not every case of insubordination or willful
disobedience by an employee reasonably deserves the penalty of dismissal. The penalty to be
imposed on an erring employee must be commensurate with the gravity of his offense.

To the Court’s mind, the case of an employee who is compelled to apologize for a previous
infraction but fails to do so is not one which would properly warrant his termination, absent any
proof that the refusal was made in brazen disrespect of his employer.

MORENO V SAN SEBATIAN COLLEGE-RECOLETOS MANILA

Even if dismissal for cause is the prescribed penalty for the misconduct herein committed, in
accordance with the Faculty Manual and Moreno’s employment contract, the Court finds the
same to be disproportionate to the offense. Time and again, we have ruled that while an
employer enjoys wide latitude of discretion in promulgation of polices, rules, and regulations on
work-related activities of the employees, those directives, however, must always be fair and
reasonable, and the corresponding penalties, when prescribed, must be commensurate to the
offense involved.
 TERMINATION OF EMPLOYMENT BY EMPLOYEE

RESIGNATION

LC 300. Termination by employee. (a) 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.

(b) an employee may put an end to the relationship without serving any notice on the
employer for any of the following just causes:

i. Serious insult by the employer or his representative on the honor and person of the
employee;
ii. Inhuman and unbearable treatment accorded the employee by the employer or his
representative;
iii. 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
iv. Other causes analogous to any of the foregoing

RESIGNATION
The voluntary act of an employee who finds himself in a situation where he believes that personal
reason cannot be sacrificed in favor of the exigency of the service, then he has no other choice
but to disassociate himself from his employment

JUST CAUSE

LC300. (b) an employee may put an end to the relationship without serving any notice on the
employer for any of the following just causes:

i. Serious insult by the employer or his representative on the honor and person of the
employee;
ii. Inhuman and unbearable treatment accorded the employee by the employer or his
representative;
iii. 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
iv. Other causes analogous to any of the foregoing
WITHOUT JUST CAUSE- requisites

LC 300. (a) 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.

BONAFIDE SUSPENSION OF OPERATIONS/PERFORMANCE OF MILITARY OR CIVIC DUTY

LC 301. The bonafide suspension of the operation of a business or undertaking for a period not
exceeding six monts 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
1 month from the resumption of operations of his employer or from his relief from the military
or civic duty.

FORCED RESIGNATION

In voluntary resignation, the employee is compelled by persona reason(s) to disassociate himself

from employment. It is done with the intention of relinquishing an office, accompanied by the
act of abandonment. To determine whether the employee indeed intended to relinquish such
employment, the act of the employee before and after the alleged resignation must be
considered.

RESIGNATION FOR NONPAYMENT OF WAGES, CONSTRUCTIVE DISMISSAL

A quitting because employment is rendered impossible, unreasonable, or unlikely, as, an offer
involving a demotion in rank and a diminution in pay.

An employer’s act amounting to dismissal but made to appear as if it were not,

DREAMLAND HOTEL RESORT V JOHNSON

While it was Johnson who tendered his resignation, it was due to the petitioner’s acts that he
was constrained to resign. The petitioners cannot expect Johnson to tolerate working for them
without any compensation. Since Johnson was constructively dismisses, he was illegally
dismissed.
An illegally dismissed employee is entitled to two reliefs: backwages and reinstatement, the two
reliefs provide are separate and distinct. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the employer, separation pay is
granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and backwages.
GILLES V CA
Invariably, the law recognizes and resolves such situation in favor of the employees in order to
protect their rights from the coercive acts of the employer. Resignation contemplates a voluntary
act; thus, an employee who is forced to relinquish his position due to the employer’s unfair or
unreasonable treatment is deemed to have been illegally terminated or discharged. The test of
constructive dismissal is whether a reasonable person in the employee’s position would have felt
compelled to give up his position under the circumstances.

TERMINATION OF EMPLOYMENT BY EMPLOYER

LC 297. Termination by employer. 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; and

5. Other causes analogous to the foregoing

YABUT V MERALCO
An employer may terminate an employment for any of the cases in LC 297.

We emphasize the dismissal of a dishonest employee to the best interest not only of the
management but also of labor, as a measure of self-protection against acts inimical to its interest,
a company has the right to dismiss his erring employees. An employer cannot be compelled to
continue employing an employee guilty of acts inimical to the employer’s interest, justifying loss
of confidence in him.
INHERENT RIGHT TO DISCIPLINE IS SUBJECT OT REASONABLE STATE REGULATION IN THE
EXERCISE OF ITS POLICE POWER

HOLCIM PHIL V OBRA

There is no question that the employer has the inherent right to discipline, including that of
dismissing its employees for just causes. This right is, however, subject to reasonable regulation
by the State in the exercise of its police power. Accordingly, the finding that an employee violate
company rules and regulations is subject to scrutiny by the Court to determine if the dismissal is
justified and, if so, whether the penalty imposed is commensurate to the gravity of his offense.

SERIOUS MISCONDUCT

Misconduct- improper or wrong conduct; it is the transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful
intent and not mere error in judgment.

To be considered “serious,” it must be of such a grave and aggravated character and not merely
trivial or unimportant.

Elements:
1. It must be serious;
2. It must relate to the performance of the employee’s duties; and
3. It must show that the employee has become unfit to continue working for the employer.
(Johansen World Group Corporation v Gonzales III)

Examples of misconduct:

- Pressuring, inducing, and influencing others to commit dereliction of duty

- The use of obscene, insulting or offensive words against a superior
- Sleeping on the post
- Challenging superior officers to a fight
- Sexual harassment

UNIVERSAL CANNING, INC V CA

Infraction of the company rules and regulations which is akin to serious misconduct is a just cause
for termination of employment recognized under Art282 of the Labor Code. Misconduct is
defined as an improper or wrong conduct. It is a transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful
intent and not mere error in judgment.

The use of the company’s time and premises for gambling activities is a grave offense which
warrants the penalty of dismissal for it amounts to theft of the company’s time and it is explicitly
prohibited by the company rules on the ground that it is against public morals.
DISOBEDIENCE

Elements:
1. The employeee’s assailed conduct must have been willful or intentional (wilfulness
characterized by a wrongful and perverse attitude)
2. The order violated must have been:
a. Reasonable
b. Lawful
c. Made known to the employe; and
d. Must pertain to the duties which he had been engaged to discharge
(Gold City Integrated Port Services, Inc. v NLRC)

GROSS AND HABITUAL NEGLECT OF DUTIES

Gross Negligence
- Generally means an absence of that diligence that an ordinarily prudent man would use
in his own affairs
- The want or absence of or a failure to exercise slight care or diligence, or the entire
absence of care; it evinces a thoughtless regard of consequences without exerting any
effort to avoid them. (PNB v Padao)
- Connotes a want of care in the performance of one’s duties (Publico v Hospital Manager,
Inc)

Habitual Neglect
- Implies repeated failure to perform one’s duties for a period of time, depending upon the
circumstances

Elements of negligence in termination of employment

Such negligence must be:
1. Gross; and
2. Habitual

Note:
- A single or isolated act of negligence cannot constitute as a just casue for termination or
dismissal
- Unsatisfactory performance is not the same as gross and habitual neglect of duties, and
thus, is not a just cause for termination
RESPONDEAT SUPERIOR (COMMAND RESPONSIBILITY)

JUMUAD V HI-FLYER FOOD, INC

Reports of Hi-Flyer show that there were anomalies committed in the branches managed by
Jumuad. On the principle of respondeat superior or command responsibility alone, Jumuad may
be held liable for negligence in the performance of her managerial duties. She may not have been
directly involved in causing cash shortages in KFC Bohol, but her involvement in not performing
her duty monitoring and supporting the day to day operations of the branches and ensure that
all the facilities and equipment at the restaurant were properly maintained and serviced, could
have truly prevented the whole debacle from ever occurring .

Rather than taking proactive steps to prevent the anomalies at her branches, Jumuad merely
affected remedial measures. In the restaurant business where the health and well-being of the
consuming public is at stake, this does not suffice. Thus, there is reasonable basis for Hi-Flyer to
withdraw its trust in her and dismissing her from its service.

Gross negligence
- The want or absence of or a failure to exercise slight care or diligence, or the entire
absence of care; it evinces a thoughtless disregard of consequences without exerting any
effort to avoid them (PNB v Dan Padao)
- Constitutes a valid just cause for termination of employment

Simple negligence
- Simple neglect of duty is the failure of an employee to give attention to a task expected
of him, and signifies disregard of a duty resulting from carelessness or indifference.
(Panaligon v Valente)
- Not a valid cause for termination of employment

Includes: GROSS INEFFICIENCY

CENTURY IRON WORKS V BAÑAS

Art282 of the Labor Code provides that one of the just causes for terminating an employment is
the employee’s gross and habitual neglect of duties. This cause includes gross inefficiency,
negligence and carelessness. Fraud and willful neglect of duties imply bad faith of the employee
in failing to perform his job, to the detriment of the employer and the latter’s business.

To our mind, such numerous infractions are sufficient to hold him grossly and habitually
negligent. His repeated negligence is not tolerable. The totality of infractions or the number of
violations he committed during his employment merits his dismissal. Moreover, gross and
habitual negligence includes unauthorized absences and tardiness, as well as gross inefficiency,
negligence and carelessness.
LOSS OF TRUST AND CONFIDENCE

While the right of an employer to select or discharge his employee is regulated by the State, an
employer cannot be compelled to continue the employment of an employee guilty of acts
inimical to its interests. To be a valid reason of dismissal, loss of confidence must be genuine.

Guidelines in the application of the doctrine

1. Loss of confidence should not be simulated

2. It may not be arbitrarily asserted in the face of overwhelming evidence
3. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified;
4. It must be genuine, not mere afterthought to justify earlier action, taken in bad faith; and
5. The employee involved holds a position of trust and confidence
(Midas Touch Food Corp. v NLRC)

Elements of loss of trust and confidence in termination of employment

1. The employee concerned must be one holding a position of trust and confidence either:
i. Managerial employees or
ii. Fiduciary rank-and-file employees
2. Loss of confidence must be based on:
i. A willful breach of trust
ii. Done intentionally, knowingly, and purposely,
iii. Without justifiable excuse (Wesleyan University Phils v Reyes)

Requisites for FRAUD to constitute as a just cause for termination

1. Fraud must be committed against the employer or representative;
2. The fraud must be in connection with the employee’s work

Examples of dishonesty:
- Falsification of time cards
- Theft of company property

WESLEYAN UNIVERSITY PHILS v REYES

With respect to rank-and-file personnel, loss of trust and confidence, as ground for valid
dismissal, requires proof of involvement in the alleged events in question, and that mere
uncorroborated assertions and accusations by the employer would not suffice. With respect to a
managerial employee, the mere existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his dismissal.
VILLANUEVA JR V NLRC & MECO
The loss of trust and confidence must be based on willful breach of trust reposed in the employee
by his employer. Such breach is willful if it is done intentionally, knowingly, and purposely,
without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly,
or inadvertently.

Moreover, it must be based on substantial evidence and not on the employer’s whims or
suspicions. Otherwise, the employee would eternally remain at the mercy of the employer.

TWO CLASSES OF CORPORATE POSITIONS OF CLASS AND CONFIDENCE

PJ LHULLIER V VELAYO
There are two classes of corporate positions of trust: on the one hand are the managerial
employees. On the other hand, are the fiduciary rank-and-file employees.

MANAGERIAL EMPLOYEES
Those who by the nature of their position, are entrusted with confidential and delicate matters
and from whom greater fidelity to duty is correspondingly expected. (Baguio Central University v
Gallente)

Those who are “vested with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees, or to effectively recommend such managerial actions.”

Those whose primary duty consists of the management of the establishment in which they are
employed or of a department or a subdivision thereof, and other officers or members of the
managerial staff.

FIDUCIARY RANK-AND-FILE EMPLOYEES

Those who, in the normal and routine exercise of their functions, regularly handle significant
amounts of the employer’s money or property.

These employees, though rank-and-file, are routinely charged with the care and custody of the
employer’s money or property and are thus classified as occupying positions of trust and
confidence. (PJ LHUILLER INC v VELAYO)
Ex. Cashiers, auditors, property custodians

HORMOSILLA V COCA-COLA BOTTLERS PHIL, INC

Hormillosa, being a route salesman, falls under the second class. By selling soft drink products
and collecting payments for the same, he was considered an employee who regularly handled
significant amounts of money and property in the normal and routine exercise of his functions.
The nature of the position of a route salesman was described in Coca-cola Bottlers, Phils. v
Kapisanan ng Malayang Manggagawa sa Coca-Coca -FFW and Florention Ramirez, where it was
written: We agree that route salesmen are likely individualistic personnel who roam around
selling softdrinks, deal with customers and are entrusted large asset and funds and property of
the employer. There is a high degree of trust and confidence reposed on them, and when
confidence is breached, the employer may take proper disciplinary action on them.

The work of a salesman exposes him to voluminous financial transactions involving his employer’s
goods. The life if the soft drinks company depends not so much on the bottling or production of
the production of the product since this is primarily done by automatic machines and personnel
who are easily supervised but upon mobile and fa-ranging salesmen who go from store to store
all over the country or region. Salesmen are highly individualistic personnel who have to be
trusted and left essentially on their own. A high degree of confidence is reposed on them because
they are entrusted with funds or properties of their employer.

CHUANICO V LEGACY CONSOLIDATED PLANS, INC

The CA found reasonable basis for believing that Atty. Chuanico had breached his employer’s
trust. He was not a mere rank-and-file employee but an in-house counsel. Thus, Legacy
Consolidated enjoyed wide latitude in evaluating his work and attitude and in terminating his
employment on the ground of loss of trust and confidence. His mishandling of the cases assigned
to him shows that he had been unfit to continue working for his employer.

But these are broad principles that do not themselves show when, where, and how Atty.
Chuanico betrayed the trust that Legacy Consolidated gave him as in-house counsel.

The company charged him with having mishandled two things that were assigned to him, the
drafting of an answer in one and the preparation of a complaint affidavit in the other. It failed to
present proof, however, of such mishandling.

COMMISSION OF A CRIME

LC297. Termination by employer. (d) 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; and

NOTE: the immediate members referred to are limited to spouse, ascendants, descendants, or
legitimate, natural, or adopted brothers or sisters of the employer or of his relative by affinity in
the same degrees, and those by consanguinity within the fourth civil degree.
- The conviction of an employee in a criminal case is not indispensable to warrant his
dismissal and the fact that a criminal complaint against the employee had been dropped
by the fiscal is not binding and conclusive upon the Court or the labor tribunals.
COPY CENTRAL DIGITAL COPY SOLUTION V DOMRIQUE
A criminal conviction is not necessary to find just cause for employment termination. Otherwise
stated, an employee’s acquittal in a criminal case, especially one that is grounded on the
existence of reasonable doubt, will not preclude a determination in a labor case that he is guilty
of acts inimical to the employer’s interests. In the reverse, the finding of probable cause is not
followed by automatic adoption of such finding by the labor tribunals. In other words, whichever
way the public prosecutor disposes of a complaint, the finding does not bind the labor tribunal.

ANALOGOUS CASES

LC297. Termination by employer. ( e. ) Other causes analogous to the foregoing.

The determination of whether the cause for terminating employment is analogous to any of
those enumerated in LC297 will depend on the circumstances of each case. To be considered
analogous to the just causes, however, a cause must be due to the voluntary and/or willful act or
omission of the employee.

CATHEDRAL SCHOOL OF TECHNOLOGY v NLRC

An evaluative review of the records of this case nonetheless supports a finding of a just cause for
termination. The reason for which private respondent’s services were terminated, namely, her
unreasonable behavior and unpleasant deportment in dealing with the people she closely works
with in the course of her employment, is analogous to the other “just causes” enumerated under
the Labor Code.

LIM v NLRC
We cannot but agree with PEPSI that “gross inefficiency” falls within the purview of “other causes
analogous to the foregoing,” and constitutes, therefore, just cause to terminate an employee
under the Labor Code. One is analogous to the another if it is susceptible of comparison with the
latter either in general or in some specific detail; or has a close relationship with the latter. “Gross
inefficiency” is closely related to “gross neglect,” for both involve specific acts of omission on the
part of the employee resulting in damage to the employer or to his business. In Busier v Leogardo,
this Court ruled that failure to observe prescribed standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just cause for dismissal.

MINDANAO TERMINAL AND BROKERAGE SERVICES, INC. v NAGKAHIUSANG MAMUMUO SA

MINTERBRO-SOUTHERN PHILIPPINES FEDERATION OF LABOR
In sum, the petitioner’s inaction on what they allege to be the unexplained abandonment by Del
Monte of its obligations under the Contract for the Use of the Pier coupled with the petitioners’
belated action on the damaged condition of the pier caused the absence of available work for
the union members. As petitioners were responsible for the lack of work at the pier and,
consequently, the layoff of the union members, they are liable for the separation from
employment of the union members on a ground similar to retrenchment.
OTHER CAUSES
1. Abandonment
- A form of neglect of duty. There must be a clear and deliberate intent to discontinue one’s
employment without any intention of returning.

Elements of abandonment:
a. The failure to report for work or absence without valid or justifiable reason; and
b. A clear intention to sever the employer-employee relationship

The second element is the more determinative factor and must be manifested by some
overt act/s.

Note: immediate filing of a complaint for illegal dismissal with prayer for reinstatement
shows that the employee was not abandoning his work

BROWN V MARSWIN MARKETING, INC

In order for the employer to discharge its burden to prove that the employee committed
abandonment, which constitutes neglect of duty, and is a just cause for dismissal, the employer
must prove its elements.

The second requirement must be manifested by overt acts and is more determinative in
concluding that the employee is guilty of abandonment. This is because abandonment is a matter
of intention and cannot be lightly presumed from indefinite acts.

DEEJAY’S INN AND CAFÉ v RANESES

It bears to point out that in the case at bar, the Labor Arbiter, the NLRC, and even the Court of
Appeals , all consistently found that the respondent was not able to present substantial evidence
of her dismissal. They all rejected the join affidavit of Mercy and Mea, submitted by respondent,
for being partial and biased. It appears that Mercy and Mea executed said affidavits to return a
favor as respondent testified for them in their own cases against petitioners. The Court of Appeals
only deviated from the findings of the Labor Arbiter and the NLRC by also disregarding Eva’s
affidavit, submitted by petitioners to corroborate their allegations, for being insufficient to prove
abandonment. The appellate court then applied the equipoise doctrine: with all things
considered equal, all doubts must be resolved in favor of labor, that is, respondent.

MALLO v SEA COLLEGE INC.

More importantly, Mallo’s filing of a complaint for illegal dismissal, coupled with his prior acts of
actively inquiring about his teaching load, negate any intention on his part to sever his
employment. Indeed, it is simply absurd for Mallo to provide continuous service to SACI for more
than three years in order to attain a regular status, only to leave his job without any justifiable
reason and, thereafter, file a case in an attempt to recover the same. To reiterate, abandonment
of position is a matter of intention and cannot be lightly inferred, much less legally presumed,
from certain equivocal acts.
PROTECTIVE MAXIMIM SECURITY AGENCY v FUENTES
The NLRC and the CA found that respondent’s failure to return to work was justified because of
his detention and its adverse effects. The CA found that petitioner did not refute the allegation
that respondent, while in the custody of the police, suffered physical violence in the hands of its
employees. Thus, the CA gave credence to the report submitted by Inspector Escartin, which
stated that respondent was “so traumatized that he actually asked to remain in the custody of
the police because he feared for his life.” The CA further found that respondent experienced
intense fear, “manifested by the fact that he left the custody of the police only when his mother
accompanied him.” Thus, the intervening period when respondent failed to report for work, from
respondent’s prison release to the time he actually reported for work, was justified. Since there
was a justifiable reason for respondent’s absence, the first element of abandonment was not
established.

TAN BROS. CORP OF BASILAN v ESCUDERO

While it is true that Escudero’s complaint prayed for separation pay in lieu of reinstatement, Tan
Brothers loses sight of the fact, however that it had the burden or proving its own allegation that
Escudero had abandoned her employment in July 2003. As allegation is not evidence, the rule
has always been to the effect that a party alleging a critical fact must support his allegation with
substantial evidence. Confronted with Escudero’s assertion that she reported for work despite
irregular payment of her salaries and was forced to stop doing so after her wages were not paid
in May 2004, the record shows that Tan Brothers proffered nothing beyond bare allegations to
prove that Escudero had abandoned her employment in July 2003.

2. HABITUAL TARDINESS/ABSENTEEISM

SANTOS v INTEGRATED PHARMA, INC.

Santos’ tardiness is so excessive that it already affects the general productivity and business of
Integrated Pharma. It has amounted to gross and habitual neglect of duty, which is a just cause
for terminating employment under Art 282 of the Labor Code.

R.B. MICHALE PRESS v GALIT

Habitual tardiness is a form of neglect of duty. Lack of initiative, diligence, and discipline to come
to work on time everyday exhibit the employee’s deportment towards work. Habitual and
excessive tardiness is inimical to the general productivity and business of the employer. This is
especially true when the tardiness and/or absenteeism occurred frequently and repeatedly
within an extensive period of time.

The mere fact that the numerous infractions of respondent have not been immediately subjected
to sanctions cannot be interpreted as condonation of the offenses or waiver of the company to
enforce company rules.

3. POOR PERFORMANCE/ INCOMPETENCE

 - Tantamount to poor inefficiency and incompetence in the performance of official duties.
An unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and
habitual neglect of duties. Poor or unsatisfactory performance of an employee does not
necessarily mean that he is guilty of gross and habitual neglect of duties. To ascribe gross
neglect, there must be lack of or failure to exercise slight care or diligence, or the total
absence of care in the performance of duties. In other words, there is gross neglect when
the employee exhibits thoughtless disregard of consequences without exerting effort to
avoid them. On the other hand, habitual neglect involves repeated failure to perform
duties for a certain period of time, depending upon the circumstances, and not mere
failure to perform duties in a single or isolated instance.

FLOATING STATUS BEYOND 6 MONTHS/LACK OF SERVICE ASSIGNMENT FOR A CONTINOUS

PERIOD OF 6 MONTHS (per DO 14-01)

LC301. When employment not deemed terminated.

DO No. 14-01 Guidelines Governing Employment and Working Conditions of Security Guards and
Similar Personnel in the Private Security Industry

Sec. 9. Right to Security of Tenure and Due Process

9.3 Reserved Status. A security guard or similar personnel may be placed in a workpool or on
reserved status due to lack of service assignments after expiration or termination of the service
contract with the principal where he/she is assigned or due to the temporary suspension of
agency operations.

No security guard or personnel can be placed in a workpool or reserved status in any of the
following situations: (a) after the expiration of a service contract if there are other principals
where he/she can be assigned; (b) as a measure to constructively dismiss the security guard; and
(c) as an act of retaliation for filing of compaints against the employer on violations of labor laws,
among others.

If after a period of 6 months, the security agency/employer cannot provide work or give an
assignment to the reserved security guards, the latter can be dismissed from service and shall be
entitled to separation pay as described in subsection 5.6.

Security guards on reserved status who accept employment in other security agencies or
employers before the end of the above six-month period may not be given separation pay.

Note: The so-called “floating status” of an employee should only last for a legally prescribed
period of time. When the “floating status” of an employee lasts for more than six months, he
may be considered to have beenillegally dismissed from service.
TRANSFER/REASSIGNMENT OF WORK

Transfer- a movement from one position to another which is of equivalent rank, level, or salary,
without break in service. (Milares v Subido)

Note: the right to transfer or reassign an employee is a management prerogative.

The requirements for termination of employment due to willful disobedience need to be
observed with greater prudence in cases of orders transferring him from one location to another.
Disobedience of a valid transfer order may justify dismissal while an invalid one does not.

VALID TRANSFER
The right of an employer to transfer the employees in the interest of the efficient and economic
operation of its business cannot be seriously challenged. That is its prerogative. The only
limitation on the discretion of management in this regards is its mala fides. The only time the
employer cannot exercise this right is where it is vitiated by improper motive and is merely a
disguised attempt to remove or punish the employee sought to be transferred. (BPI Employees
Union-ALU v NLRC)

INVALID TRANSFER
The right to transfer, like all management prerogative rights, must be exercised without grave
abuse of discretion. It cannot be used as a subterfuge by the employer to rid himself of an
undesirable worker or when the real reason is to penalize an employee for, say, union activities.

Note: an employee who disobeys an “inconvenient transfer” may be validly dismissed for willful
disobedience, absent any showing of bad faith on the part of the employer in effecting the
transfer.

Guidelines in transferring employees

1. a transfer is a movement from one position to another of equivalent rank, level, or salary
without break in the service or a lateral movement from one position to another of
equivalent rank or salary;
2. the employer has the inherent right to transfer or reassign an employee for legitimate
business purposes;
3. a transfer becomes unlawful where it is motivated by discrimination or bad faith or is
effected as a form of punishment or is a demotion without sufficient cause;
4. the employer must be able to show that the transfer is not unreasonable, inconvenient,
or prejudicial to the employee. (Peckson v Robinsons Supermarket Corp.)

PREVENTIVE SUSPENSION
Preventive suspension is a disciplinary measure for the protection of the company’s property
pending investigation of any alleged malfeasance or misfeasance committed by the employee.
(Gatbonton v NLRC)

When preventive suspension may be legally imposed

 - where the employee’s continued employment poses a serious or imminent threat to the
life or property of the employer or of the employee’s co-workers. Without this kind of
threat, preventive suspension is not proper. (Artificio v NLRC)
- when an employee whose alleged violation is the subject of an investigation (Maula v
Ximex Delivery Express, Inc)

Purpose: to prevent harm or injury to the company as well as to fellow employees.

MAULA V XIMEX DELIVERY EXPRESS, INC

No hearing or conference was called with respect to petitioner’s alleged misconduct. Instead, he
was immediately placed under preventive suspension for 30 days and was dismissed while he
was still serving his suspension. According to respondent, it is proper to suspend him pending
investigation because his continued employment poses serious and imminent threat to the life
of the company officials and also endanger the operation of the business of respondent, which
is a common carrier duty bound to observe extraordinary diligence.

Here, it cannot be said that the petitioner posed a danger on the lives of the officers or employees
of respondent or their properties. Being one of the Operation Staff, which was a rank and file
position, he could not and would not be able to sabotage the operations of respondent. The
difficulty of finding a logical and reasonable connection between his assigned tasks and the
necessity of his preventive suspension is apparent from the fact that even respondent was not
able to present concrete evidence to support its general allegation.

GATBONTON V NLRC.
When it is determined that there is no sufficient basis to justify an employee’s preventive
suspension, the latter is entitled to the payment of salaries during the time of preventive
suspension.