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RECENT SUPREME COURT RULINGS FOUND ON ITS DECISIONS DEALING WITH TERMINATION DISPUTES AS PUBLISHED IN THE SCRA By DEAN FROILAN M. BACUNGAN
I.EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP 5-1. Appointment letters or employment contracts, payrolls, organization charts, SSS registration, personnel list, as well as testimony of co-employees, may serve as evidence of employee status; While technical rules are not strictly followed in the NLRC, this does not mean that the rules on proving allegations are entirely ignored. McLeod vs. National Labor Relations Commission, 512 SCRA 222. 59-1. The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct, or the so-called control test, considered to be the most important element. Coca-Cola Bottlers (Phils.), Inc. vs. Climaco, 514 SCRA 164. 64-1. Drivers like Lebatique, are under the control and supervision of management officers. Lebatique, therefore, is a regular employee whose tasks are usually necessary and desirable to the unusual trade and business of the company. Thus, he is entitled to the benefits accorded to regular employees of Far East, including overtime pay and service incentive leave pay. Far East Agricultural Supply, Inc. vs. Lebatique, 515 SCRA 491. 66-1. The relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-employee and not of lessor-lessee. Gabriel vs. Bilon, 515 SCRA 29. 84. Elements constituting the reliable yardstick whenever the existence of an employment relationship is in dispute; An employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end. Pacific Consultants International Asia, Inc. vs. Schonfeld, 516 SCRA 209 When there is no employer-employee relationship 60-2. There is nothing wrong with the employment of a doctor as a company retained physician; Where there is no employer-employee relationship between the parties, the termination of the Retainership Agreement, which is accordance with the provisions of the Agreement, does not constitute illegal dismissal of the retained physician. Coca-Cola Bottlers (Phils.), Inc. vs. Climaco, 514 SCRA 164. KINDS OF EMPLOYER-EMPLOYEE RELATIONSHIP 74-7. A contract of employment stipulating a fixed-term, even if clear as regards the existence of a period, is invalid if it can be shown that the same was executed with the intention

of circumventing security of tenure, and should thus be ignored. Fabela vs. San Miguel Corporation, 515 SCRA 288. 85-1. Even is an employee is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, it does not preclude the fixing of employment for a definite period. Caparoso vs. Court of Appeals, 516 SCRA 30. 121-17. The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the casual business or trade of the employer. Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691. 163-7. Probationary employees, while not entitled to permanent status, are still entitled to the constitutional protection of security of tenure. Espina vs. Court of Appeals, 519 SCRA 327. 196-1. The applicable formula to ascertain whether an employment should be considered regular or non-regular is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 197-2. As defined, project employees are those workers hired 1) for a specific project or undertaking and 2) the completion or termination of such project or undertaking has been determined at the time of the engagement of the employee. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 198-3. The absence of a definite duration for the project/s has led the Court to conclude that respondents are, in fact, regular employees. PNOC-Energy Development Corp., vs. National Labor Relations, Commission, 521 SCRA 222. 199-4. It must be stressed that a contract that misuses a purported fixed-term employment to block the acquisition of tenure by employees deserves to be struck down for being contrary to law, morals, good customs, public order and public policy. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 200-5. In Filipinas Pre-Fabricated Building Systems (Filsystems), Inc. vs. Puente (453 SCRA 820, 2005), the Court ruled that the length of service of a project employee is not the controlling test of employment tenure but whether or not the employment has been fixed for a specific project or undertaking the completion and termination of which has been determined at the time of the engagement of the employee. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 206-6. As regular workers, respondents are entitled to security of tenure under Article 279 of the Labor Code and can only be dismissed for a just or authorized cause. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. 210-10. An employer has the recognized right and prerogative to select the persons to be hired and to designate the work as well as the employee or employees to perform it. Soriano, Jr. vs. National Labor Relations Commission, 521 SCRA 526. 118-14. An objection founded on the ground that one has better credentials over the appointee is frowned upon so long as the latter possesses the minimum qualifications for the position. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 226-5. Granting that respondent was merely a probationary employee, he was still entitled to security of tenure and may only be terminated for a just cause or when he fails to

qualify as a regular employee in accordance with reasonable standards made known to him by petitioner at the time of his engagement. Alay sa Kapatid International Foundation, Inc. (AKAP) vs. Dominguez, 524 SCRA 719. 231-4. The practice of having fixed-term contracts in the broadeast industry does not automatically make all talent contracts valid and complaint with labor law the assertion that a talent contract exists does not necessarily prevent a regular employment status. Dumpit-Murillo vs. Court of Appeals, 524 SCRA 350. 232-5. The law does not preclude the employer from terminating the probationary employment, if the employer finds that the probationary employee is not qualified for regular employment. The law in protecting the rights of the laborer authorizes neither the oppression nor the self-destruction of the employer. Pasamba vs. National Labor Relations Commission, 524 SCRA 350. 247-2. The provision which states that the probationary period shall not exceed six months means that the probationary employee may be dismissed for cause at any time before the expiration of six months after hiring. Pasamba vs. National Labor Relations Commission, 524 SCRA 350. 103-1. Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period. Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691. 104-2. Although Article 280 of the Labor Code, as amended, does not forbid fixed term employment, it must, nevertheless, meet any of the following guidelines in order that it cannot be said to circumvent security of tenure: (1) that the fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or (2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691. 248-3. An employer, such as a medical center, cannot be compelled to continue employing a probationary employee who, as early as three months after she was hired, had shown herself inclined to violate the more serious of the companys rules. Pasamba vs. National Labor Relations Commission, 524 SCRA 350. 249-4. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. Consolidated Broadcasting System, Inc. vs. Oberio, 524 SCRA 365. 250-5. Granting that respondent was merely a probationary employee, he was still entitled to security of tenure and may only be terminated for a just cause or when he fails to quality as a regular employee in accordance with reasonable standards made known to him by petitioner at the time of his engagement. Alay sa Kapatid International Foundation, Inc. (AKAP) vs. Dominguez, 524 SCRA 719. 251-1. Project or contractual employees are required to be apprised of the project they will undertake under a written contract. Consolidated Broadcasting System, Inc. vs. Oberio, 524 SCRA 365.

256-4. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. 258-6. Employers who hire project employees are mandated to state and, once its veracity is challenged, to prove the actual basis for the latters dismissal. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. 275-23. Confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate investigation such employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws. Philippine Transmarine Carriers, Inc. vs. Carilla, 525 SCRA 586. 290-2. Employers who hire project employees are mandated to state and, once it veracity is challenged, to prove the actual basis for the latters dismissal. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. 291-1. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. 292-2. The practice of submitting evidence late lie in a motion for reconsideration before the Court of Appeals cannot be tolerated, for it defeats the speedy administration of justice involving poor workers, aside from being unfair. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring. Olongapo Maintenance Services, Inc. vs. Chantengco, 525 SCRA 252. II. TERMINATION OF EMPLOYMENT BY THE EMPLOYER 100-3. The legal principle that the employer has the onus pro-bandi to show that the employees separation from employment is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause presupposes that there is indeed an involuntary separation from employment and the facts attendant to such forced separation was clearly established. Portuguez vs. GSIS Family Bank (Comsavings Bank), 517 SCRA 309. Abandonment 43-11. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever the employee-employer relationship. Angeles vs. Fernandez, 513 SCRA 378. 80-13. To constitute abandonment as a just cause for dismissal, there must be: a) absence without justifiable reason; and b) a clear intention, as manifested by some overt act, to sever the employer-employee relationship. Far East Agricultural Supply, Inc. vs. Lebatique, 515 SCRA 491. 186-9. It bears emphasis that for termination of employment on the ground of abandonment to be considered valid, the employer must prove, by substantial evidence, the concurrence of two essential requisites: At first, the failure of the employee to report for work or his absence from work without valid or justifiable reason; and second, his clear and deliberate intention to discontinue his employment. NS Transport Services, Inc. vs. Zeta, 520 SCRA 261. 189-12. Whether an employee abandoned his job or was illegally dismissed are questions of fact better left to quasi-judicial agencies to determine. Mame vs. Court of Appeals, 520 SCRA 552.

Resignation 19-10. If indeed an employee was made to resign against her will, she should not have allowed a considerable length of time to elapse before enforcing her rights allegedly violated. Amkor Technology Philippines, Inc. vs. Juangco, 512 SCRA 325. 99-2. There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. Duldulao vs. Court of Appeals, 517 SCRA 191. 100-3. The legal principle that the employer has the onus pro-bandi to show that the employees separation from employment is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause presupposes that there is indeed an involuntary separation from employment and the facts attendant to such forced separation was clearly established. Portuguez vs. GSIS Family Bank (Comsavings Bank), 517 SCRA 309. Suspension of Operation by the Employer Floating Status 94-10. A floating status requires the dire exigency of the employers bona fide suspension of operation of a business or undertaking; When a security guard is placed on a floating status he does not receive any salary or financial benefit provided by law. Pido vs. National Labor Relations Commission, 516 SCRA 609. Valid reason needed 2-2. An employer cannot discharge this burden of proving that there is a just cause for the dismissal of an employee by merely alleging that it did not dismiss the employee. Seven Star Textile Company vs. Dy, 512 SCRA 486. Suspension 95-11. If employer chooses to extend the period of suspension, he is required to pay the wages and other benefits due the worker and the worker is not bound to reimburse the amount paid to him during the extended period of suspension even if after the completion of the hearing or investigation the employer decides to dismiss him. Pido vs. National Labor Relations Commission, 516 SCRA 609. III. TWO PREREQUISITES FOR TERMINATION EMPLOYER MAYBE DEEMED LEGAL VALID REASONS FOR TERMINATION 147-12. It is a well-established rule that the employer has the burden of proving a valid dismissal of an employee, for which two requisites must concur. Cabalen Management Co., Inc., vs. Quiambao, 518 SCRA 342. 148-13. To establish a just or authorized cause for dismissal, substantial evidence or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion is required. Cabalen Management Co., Inc., vs. Quiambao, 518 SCRA 342. OF EMPLOYMENT BY

III. TWO PREREQUISITES FOR TERMINATION OF EMPLOYMENT BY EMPLOYER MAYBE DEEMED LEGAL 159-3. For dismissal to be valid, the evidence must be substantial and not arbitrary and must be founded on clearly established facts. Philippine Long Distance Telephone Co., Inc. vs. Balbastro, 519 SCRA 233. 160-4. The benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the employer. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an imjustice to the employer justitia nemini neganda est (Justice is to be denied to none). Philippine Long Distance Telephone Co., Inc. vs. Balbastro, 519 SCRA 233. 224-3. In labor cases, the employer has the burden of proving that the dismissal was for a just cause; failure to show this would necessarily mean that the dismissal was unjustified and, therefore, illegal. Consolidated Broadcasting System, Inc. vs. Oberio, 524 SCRA 365. 225-4. If doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. Consolidated Broadcasting System, Inc. vs. Oberio, 524 SCRA 365. 233-6. A hospital is engaged in a business whose survival is dependent on the reputation of its medical practitioners; An employer cannot be compelled to retain an employee who is guilty of acts inimical to the interest of the employer. Pasamba vs. National Labor Relations Commission, 524 SCRA 350. 273-21. A dismissed employee is not required to prove his innocence of the charges leveled against him by is employer. Philippine Transmarine Carriers, Inc. vs. Carilla, 525 SCRA 586. 275-23. Confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate investigation such employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws. Philippine Transmarine Carriers, Inc. vs. Carilla, 525 SCRA 586. 298-2. In termination of employment disputes, the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. A. JUST CAUSES Serious Misconduct 70-3. An employee commits serious misconducts if he falsely accuses his immediate superior of robbery. Torreda vs. Toshiba Information Equipment (Phils.), Inc., 515 SCRA 133. 86-2. Misconduct has been defined as an improper or wrong conduct, and to be categorized as serious, it must be of such grave and aggravated character and not merely trivial and unimportant. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 132-1. This Court found that the misconduct committed was not related with the employees work as the offensive remarks were verbally made during an informal Christmas gathering of the employees, an occasion where tongues are more often that not loosened by liquor or other alcoholic beverages and it is to be expected that employees freely express their

grievances and gripes against their employers. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 133-2. In Autobus Workers Union (AWU) vs. NLRC [291 SCRA 219 (1998)], where dismissal was held to be an appropriate penalty for uttering insulting remarks to the supervisor. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 134-3. Lack of urgency on the part of the respondent company in taking any disciplinary action against [the employee] negates its charge that the latters misbehavior constituted serious misconduct. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 138-3. This Court found that the misconduct committed was not related with the employees work as the offensive remarks were verbally made during an informal Christmas gathering of the employees, an occasion where tongues are more often that not loosened by liquor or other alcoholic beverages and it is to be expected that employees freely express their grievances and gripes against their employers. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 167-11. The acts of an airline employee in offering a passenger the services of the airlines, without compensating for the same, while at the same time exacting a fee for himself, are undoubtedly inimical to the interest of his employer. Barba vs. Court of Appeals, 519 SCRA 448. 217-3. Misconduct is an improper or wrong conduct, a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful and character, implies wrongful intent and not mere error of judgment. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. 218-4. Although fighting within company premises may constitute serious misconduct, not every fight within company premises in which an employee is involved would automatically warrant dismissal from service. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. 219-5. It is cruel and unjust to impose the drastic penalty of dismissal if not commensurate to the gravity of the misdeed. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. 282-30. For misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the service would be patently inimical to his employers business. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. 297-1. For misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the service would be patently inimical to his employers business. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Willful Disobedience 71-4. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees. Torreda vs. Toshiba Information Equipment (Phils.), Inc., 515 SCRA 133.

75-8. To allow her to continue with her employment puts respondent under the risk of being embroiled in unnecessary lawsuits from customers similarly situated as Josefina, et al. Clearly, respondent exercised its management prerogative when it dismissed petitioner. Panuncillo vs. CAP Philippines, Inc., 515 SCRA 323. 137-2. Given to reasonableness of Geiserts decision that provoked petitioner to send the second e-mail message, the observations of the Court of Appeals that the message resounds of subversion and undermines the authority and credibility of management and that petitioner displayed a tendency to act without managements approval, and even against managements will are well taken. 245-4. An employee has no valid reason to disobey the order of transfer given by management, especially if he has tacitly given his consent thereto when he acceded to the companys policy of hiring sales staff who are willing to be assigned anywhere in the Philippines which is demanded by the employers business; By the every nature of their employment, sales executives are expected to travel. Tinio vs. Court of Appeals, 524 SCRA 533. 284-32. Even when an employee is found to have transgressed the employers rules, in the actual imposition of penalties upon the erring employees, consideration must still be given to his length of service and the number of violations committed during his employment. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Gross and Habitual Neglect of Duties 50-18. Jurisprudence recognizes as a valid ground for dismissal of an employee unauthorized use of company time. Capitol Wireless, Inc. vs. Balagot, 513 SCRA 672. 187-10. The best evidence of absenteeism or absence without official leave (AWOL) would have been the signed original or certified true copies of Zetas daily time records, which are all accessible to NS Transport Services, Inc. (NSTSI). NS Transport Services, Inc. vs. Zeta, 520 SCRA 261. Fraud/Willful Breach of Trust 37-5. Art. 277 (b) in relation to Art. 264 (a) and (e) recognizes the right to due process of all workers, without distinction as to the cause of their termination. Suico vs. National Labor Relations Commission, 513 SCRA 325. 46-14. The right of employers to dismiss employees by reason of loss of trust and confidence especially in cases of employees occupying positions of responsibility on the premise that an employee concerned holds a position of trust and confidence long recognized by law and jurisprudence. Norsk Hydro (Phils.), Inc. vs. Rosales, Jr., 513 SCRA 583. 86-2. Misconduct has been defined as an improper or wrong conduct, and to be categorized as serious, it must be of such grave and aggravated character and not merely trivial and unimportant. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 47-15. Proof beyond reasonable doubt is not needed to justify the loss of trust and confidence on the responsible officer. Norsk Hydro (Phils.), Inc. vs. Rosales, Jr., 513 SCRA 583. 87-3. A breach of trust is willful if it is done intentionally, knowingly and purposely without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 88-4. The standard of substantial evidence is satisfied where the employer has reasonable ground to believe that the employee is responsible for the misconduct which renders him

unworthy of the trust and confidence demanded by his position. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 89-5. A managerial employee is bound by more exacting work ethics. Echeverria vs. Venutek Medika, Inc., 516 SCRA 72. 96-12. More than most key positions, that of cashier calls for utmost trust and confidence-in dismissing a cashier on the ground of loss of confidence, it is sufficient that there is some basis for the same or that the employer has a reasonable ground to believe that the employee is responsible for the misconduct, thus making him unworthy of the trust and confidence reposed in him. Caeda vs. Philippine Airlines, Inc., 516 SCRA 668. 107-3. Under any standard, the work of the bookkeeper and bank assistant branch head, charged with preparing financial reports and monthly bank reconciliations, as well as head of the Accounting Department of a branch, constitutes supervisory and administrative tasks which entail great responsibility. Rural Bank of Cantilan, Inc. vs. Julve, 517 SCRA 17. 179-2. Mere failure to comply with the notice requirement of labor laws on company closure or dismissal of employees does not amount to a patently unlawful act. Carag vs. National Labor Relations Commissions, 520 SCRA 28. 197-2. As defined, project employees are those workers hired 1) for a specific project or undertaking and 2) the completion or termination of such project or undertaking has been determined at the time of the engagement of the employee. PNOC-Energy Development Corporation vs. National Labor Relations Commission, 521 SCRA 222. Commission of a Crime Analogous Cases 4-4. Through flight, one derogates the course of justice by avoiding arrest, detention, or the institution or continuance of criminal proceedings; The act of hiding to evade arrest and ward off the long arm of the law does not constitute a valid or justifiable reason for not reporting for work. Camua, Jr. vs. National Labor Relations Commission, 512 SCRA p. 677. Disease 288-36. While the Constitution does not condone wrongdoing by an employee, it nevertheless urges a moderation of the sanction that may be applied to him where a penalty less punitive would suffice, whatever missteps may have been committed by the worker ought not to be visited with a consequence so severe such as dismissal from employment. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Compulsory Retirement Penalty Imposed B.AUTHORIZED CAUSES 161-5. Work is a necessity that has economic significance deserving legal protection; Employers are also accorded rights and privileges to assure their self-determination and independence and reasonable return of capital, and this mass of privileges comprises the socalled management prerogatives; The right to close the operations of an establishment or undertaking is explicitly recognized under the Labor Code as one of the authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the purpose of circumventing the provisions on terminations of employment embodied in the Labor Code. Espina vs. Court of Appeals, 519 SCRA 327.

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Installation of labor-Saving Device Redundancy 209-9. Redundancy exists when the service capability of the work-force is in excess of what is reasonably needed to meet the demands of the business enterprise. Soriano, Jr. vs. National Labor Relations Commission, 521 SCRA 526. Retrenchment Closing or Cessation of Operation 162-6. The phrase closure or cessation of operations of establishment or undertakings includes a partial or total closure or cessation, and the phrase closure or cessation not due to serious business losses or financial reverses recognizes the right of the employer to close or cease its business operations or undertakings even in the absence of serious business losses or financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service. Espina vs. Court of Appeals, 519 SCRA 327. 179-2. Mere failure to comply with the notice requirement of labor laws on company closure or dismissal of employees does not amount to a patently unlawful act. Carag vs. National Labor Relations Commissions, 520 SCRA 28. End of Period of Employment Management Prerogative 105-1. Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees; Employees are not excused from complying with valid company policies and reasonable regulations for their governance and guidance. Rural Bank of Cantilan, Inc. vs Julve, 517 SCRA 17. 115-11. No malice or ill-will can be imputed upon an employer where the separation of an employee is undertaken by it conformably to an existing statute-justice, fairness and due process demand that an employer should not be penalized for situations where it had no participation or control. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 116-12. The prerogative to determine the place or station where an employee is best qualified to serve the interests of the company on the basis of his or her qualifications, training and performance belongs solely to the employer. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 117-13. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 122-18. The Supreme Court will not interfere with the business judgment of an employer in the exercise of its prerogative to devise means to improve its operations, provided that it does not violate the law, the CBAs, and the general principles of justice and fair play. Manila Jockey Club Employees Labor Union-PTGWO vs. Manila Jockey Club, Inc., 517 SCRA 707.

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123-19. The partiality for labor has not in any way diminished the Courts belief that justice in every case is for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine. Manila Jockey Club Employees Labor Union-PTGWO vs. Manila Jockey Club, Inc., 517 SCRA 707. 136-1. It is settled that it is the prerogative of management to regulate, according to its discretion and judgment, all aspects of employment. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 242-1. Labor laws discourage interference with an employers judgment in the conduct of his business. Tinio vs. Court of Appeals, 524 SCRA 533. 243-2. An employees right to security of tenure does no give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. Tinio vs. Court of Appeals, 524 SCRA 533. 244-3. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play having the right should not be confused with the manner in which the right is exercised. Tinio vs. Court of Appeals, 524 SCRA 533. 285-33. Management prerogatives are upheld so long as they are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws and valid agreements; The Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it may terminate an employee for a just cause, such prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. IV. REMEDIES IN CASE OF UNJUST DSMISSAL Reinstatement 78-11. If a Labor Arbiter does not issue a writ of execution of the NLRC order for the reinstatement of an employee even if there is no restraining order, he could probably be merely observing judicial courtesy, which is advisable if there is a strong probability that the issues before the higher court would be rendered moot and moribund as a result of the continuation of the proceedings in the lower court. Panuncillo vs. CAP Philippines, Inc., 515 SCRA 323. 79-12. If during the pendency of the review no order is issued by the courts enjoining the execution of a decision of the Labor Arbiter or NLRC which is favorable to an employee, the Labor Arbiter or the NLRC must exercise extreme prudence and observe judicial courtesy when the circumstances so warrant if we are to heed the injunction of the Court in Philippine Geothermal, Inc. v. NLRC [236 SCRA 371 (1994)]. Panuncillo vs. CAP Philippines, Inc., 515 SCRA 323. 93-9. Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. Aguilar vs. Burger Machine Holdings Corporation, 516 SCRA 609. 135-4. Petitioner, having been dismissed for just cause, is neither entitled to reinstatement nor to back wages. Punzal vs. ETSI Technologies, Inc., 518 SCRA 66. 221-7. The reinstatement aspect of the Labor Arbiters decision, albeit under appeal, is immediately enforceable. While it is incumbent upon the party to take an active role in his case and not adopt a wait-and-see attitude, the NLRC as an adjudicating body has the corresponding

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obligation to act promptly on all incidents brought before it. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. 286-34. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to the payment of his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. 293- An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to the payment of his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Back wages Damages 3-3. Moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. Elcee Farms, Inc. vs. National Labor Relations Commission, 512 SCRA p.602. 115-11. No malice or ill-will can be imputed upon an employer where the separation of an employee is undertaken by it conformably to an existing statute-justice, fairness and due process demand that an employer should not be penalized for situations where it had no participation or control. St. Lukes Medical Center Employees Association-AFW vs. National Labor Relations Commission, 517 SCRA 677. 287-35. The award of attorneys fees is proper and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages what is important is merely a showing that the lawful wages were not paid accordingly, as in the instant controversy. Marival Trading Inc. vs. National Labor Relations Commission, 525 SCRA 708. Liability 180-3. Article 212(e) of the Labor Code, by itself, does not make a corporate officer personally liable for the debts of the corporation. Carag vs. National Labor Relations Commissions, 520 SCRA 28. 220-6. An officer cannot be held solidarily liable with petitioner Supreme Steel Pipe Corporation (SSPC) for the termination of respondents employment, since there is no showing that the dismissal was attended with malice or bad faith. Supreme Steel Pipe Corp. vs. Bardaje, 522 SCRA 155. V. REQUIREMENTS OF DUE PROCESS 37-5. Art. 277 (b) in relation to Art. 264 (a) and (e) recognizes the right to due process of all workers, without distinction as to the cause of their termination. Suico vs. National Labor Relations Commission, 513 SCRA 325. 38-6. Art. 277 (b) provides that the procedure for termination prescribed therein is without prejudice to the adoption by the employer of company policy on the matter provided this conforms with the guidelines set by DOLE such as Rule XXII of the Implementing Rules of Book V. Suico vs. National Labor Relations Commission, 513 SCRA 325

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39-7. Company policies or practices are binding on the parties. Suico vs. National Labor Relations Commission, 513 SCRA 325. 40-8. Under Systems Practice No. 94-016, PLDT granted its employee the alternative of either filing a written answer to the charges or requesting for opportunity to be heard and defend himself with the assistance of the counsel or union representative, if he so desires. Suico vs. National Labor Relations Commission, 513 SCRA 325. 42-10. In labor cases, an opportunity to seek a reconsideration of the action or ruling complained of amounts to due process. Angeles vs. Fernandez, 513 SCRA 378. 54-2. Art. 277 (b) provides that the procedure for termination prescribed therein is without prejudice to the adoption by the employer of company policy on the matter provided this conforms with the guidelines set by the DOLE such as Rule XXII of the Implementing Rules of Book V. Suico vs. National Labor Relations Commission, 513 SCRA 325. 56-4. Under Systems Practice No. 94-016, PLDT granted its employee the alternative of either filing a written answer to the charges or requesting for opportunity to be heard and defend himself with the assistance of the counsel or union representative, if he so desires. Suico vs. National Labor Relations Commission, 513 SCRA 325. 69-2. Court agrees with the labor arbiter and the Court of Appeals that respondents were illegally dismissed by petitioners; Respondents were not accorded due process. Gabriel vs. Bilon, 515 SCRA 29. 74-7. A contract of employment stipulating a fixed-term, even if clear as regards the existence of a period, is invalid if it can be shown that the same was executed with the intention of circumventing security of tenure, and should thus be ignored. Fabela vs. San Miguel Corporation, 515 SCRA 288. 77-10. Parenthetically, when an employee admits the acts complained of, as in petitioners case, no formal hearing is even necessary. Panuncillo vs. CAP Philippines, Inc., 515 SCRA 323. 164-8. Procedural due process requires the employee be given two written notices before he is terminated, consisting of a notice which apprises the employee of the particular acts/omissions for which the dismissal is sought and the subsequent notice which informs the employee of the employers decision to dismiss him. Espina vs. Court of Appeals, 519 SCRA 327. 178-1. While labor arbiters are not required to conduct a formal hearing or trial, they have no license to dispose with the basic requirements of due process such as affording respondents the opportunity to be heard. Carag vs. National Labor Relations Commissions, 520 SCRA 28. Indemnity of those is no due process 41.9. Consistent with the ruling in Agabon, the procedural deficiency in the dismissal of Suico, et. Al. did not affect the validity or effectivity of the dismo\issal as the substantive bases thereof were never put in issue. Suico vs. National Labor Relations Commission, 513 SCRA 325. 227-6. Where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal or render it illegal or ineffectual; Employer should indemnify the employee in the form of nominal damages for the violation of his right to statutory due process. Alay sa Kapatid International Foundation, Inc. (AKAP) vs. Dominguez, 524 SCRA 719.

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VI. STATUTE OF LIMITATION 47-15. Proof beyond reasonable doubt is not needed to justify the loss of trust and confidence on the responsible officer. Norsk Hydro (Phils.), Inc. vs. Rosales, Jr., 513 SCRA 583. 166-10. In illegal dismissal cases, the employee concerned is given a period of four years from the time of his dismissal within which to institute a complaint, which period shall commence to run only upon the accrual of a cause of action of the worker. Victory Liner, Inc. vs. Race, 519 SCRA 356. 188-11. In Angeles vs. Fernandez (513 SCRA 378 [2007]), we held that the fact that the filing of the complaint by the employee 20 months after dismissal is a non-issue. NS Transport Services, Inc. vs. Zeta, 520 SCRA 261.

bar.review&mcle.lecture/2007.sc.rulings.on.termination