MODULE 10 the parties without force, duress or improper

pressure upon the employee and if it

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

How much is the retirement pay?

The Labor Code provides: Any employee may be retired upon
reaching the retirement age established in the collective
bargaining agreement or other applicable employment
contract.

In case of retirement, the employee shall be entitled to receive

such retirement benefits as he may have earned under existing
laws and any collective bargaining agreement and other
agreements: Provided, however, That an employee’s
retirement benefits under any collective bargaining and other
agreements shall not be less than those provided therein.

In the absence of a retirement plan or agreement providing for

retirement benefits of employees in the establishment, an
employee upon reaching the age of sixty (60) years or more,
but not beyond sixty-five (65) years which is hereby declared
the compulsory retirement age, who has served at least five (5)
years in the said establishment, may retire and shall be entitled
to retirement pay equivalent to at least one-half (1/2) month
salary for every year of service, a fraction of at least six (6)
months being considered as one whole year.

Unless the parties provide for broader inclusions, the term

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