authorized causes of termination

AUTHORIZED CAUSES OF

TERMINATION

Russel R. Romero

TERMINATION OF EMPLOYMENT

Authorized Causes for dismissal of employee refer to those lawful grounds for termination which in general do not arise from fault or negligence of the employee.

Just Causes are always based on acts attributable to the employee’s own fault or negligence.

Authorized Causes of Termination

Article 297. Closure of Establishment and Reduction of Personnel.

1. Installation of labor-saving devices2. Redundancy3. Retrenchment4. Closing or cessation of operation



1. Installation of labor-saving devices – Contemplates the installation of machinery to effect economy and

efficiency in the method of production.

2. Redundancy – Exist where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise.



3. Retrenchment to prevent losses – Is an economic ground to reduce the number of employees. Reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages.

4. Closure or cessation of operation – the closure of

business is a ground for the termination of the services of an employee unless the closing is for the purpose of circumventing pertinent provisions of labor code.



5. Disease – An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as health of his co-employees.



Serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended

date thereof.


The affected worker shall be entitled to a separation pay equivalent to at least his one (1) month pay or at least (1) month pay for

every year of service

SEPARATION PAY

Installation of labor-saving device and redundancy


The affected worker shall be entitled to a separation pay shall be equivalent to one (1)

month pay or at least (1/2) month pay for every year of service. A fraction of (6) months shall be

considered as (1) whole year.

SEPARATION PAY

Retrenchment to prevent losses and in cases of closures or cessation of operations.


General Milling Corporation vs. Viajar

January 30, 2013 - Redundancy

Redundancy still valid basis for terminating employee butcompany needs to show “adequate proof” to establish goodfaith.

CASES

• The supreme court held that Viajar’s termination was

illegal.

• Supreme court prove that redundancy was not enough

to show that termination was warranted.

• GMC did not exert efforts to present tangible proof

that it was experiencing business slow down.

General Milling Corporation vs. Viajar

January 30, 2013 - Redundancy

CASES

• GMC failed to present evidence which could readily

show that the company’s declaration of redundant

positions was justified.

• Viajar presented evidence that GMC had been hiring

new employees while it was firing the old ones.

Negating the claim of redundancy.

Composite Enterprises vs. Emilio M. Aparoso & Joeve Quindipan – Retrenchment

CASES

• Caparoso alleged that he was hired on November 8,

1998. • Quindipan hired on intermittent basis since 1997 and

continuously working on August 1998.• They were both dismissed from the service on October

8,1999.

PETITIONER


CASES

• They were both hired on May 11, 1999 for three months

and then on a month to month basis.

• They terminated the said employees as a result of the

expiration of their contracts of employment on October

8, 1999

RESPONDENT


CASES

• The Labor Arbiter ruled that petitioners are regular

employees in the decision dated June 15, 2000.

• Declaring complainants to have been illegally

dismissed from employment.

• Respondents are hereby ordered to immediately

reinstate to their positions.

LABOR ARBITER


CASES

• The Court of Appeals held that respondent’s manpower

requirement varies from month to month depending on

the demand from their clients for their products.

• Respondents employed petitioners for the purpose of

addressing a temporary manpower shortage.

COURT OF APPEALS


CASES

1. Whether petitioners are regular employees of respondents; and

2. Whether respondents are guilty of illegal dismissal.

The petition raises these issuesThe petition raises these issues:


CASES

Even if an employee is engaged to perform activities that

are necessary and desirable in the usual trade or

business of the employer. It does not preclude the fixing

of employment for a definite period.

Petitioners are not regular employees


CASES


1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties. That there was no indication of force, duress or improper pressure exerted on petitioners when they signed the contracts.

2. There was also no proof that respondents where regularly engaged in hiring workers for work for a minimum period of five months to prevent the regularization of their employers.


CASES


3. Hence, they are employed for a total of five months. Their employment did not even exceed six months to entitle them to become regular employees.

4. The pay slip submitted by petitioners to prove their prior employment are handwritten and indicates only the date and amount of pay. They do not indicate the name of the employer.


CASES

Petitioners were not illegally dismissed from employment

1. Petitioners terms of employment are governed by their fixed term contracts and had expired. They were not illegally dismissed from employment.

2. Petitioners employment did not exceed six months.

Zuellig Freight and Cargo Systems vs. NLRC and San Miguel – Closure of Establishment

CASES

Facts

• Ronaldo San Miguel had been a checker / custom representative of Zeta Brokerage Corp.

• On January 1994 he and other employees were informed that Zeta would cease operations, and that all affected employees including him would be separated.

• Zeta informed him through a letter, of his termination effective March 31, 1994.


CASES

Facts

• He allegedly accepted his separation pay subject to the standing offer to be hired to his former position by petitioner. On April 15, 1994, he was summarily terminated.

• San Miguel filed a complaint for unfair labor practice, illegal dismissal, non payment of salaries and moral damages against Zeta.

• Zeta contended that the dismissal is for a just cause, cessation of business operations.


CASES

Issue

Whether the dismissal due to alleged closure of business operations is valid.


CASES

Ruling

No. The cessation of business operations by Zeta was not

a bona fide closure to be regarded as a valid ground for

termination of employment of San Miguel.

The amendments in the articles of incorporation of Zeta

to change the corporate name to Zuellig Freight and

Cargo Systems did not produce its dissolution as a

corporation.


CASES

Ruling

Thus, Zuellig is bound to respect and honor Zeta’s

obligation especially with the employees’ security of

tenure.

Eleazar S. Padillo vs. Rural Bank of Nabunturan, Inc. and Mark S. Oropeza – Disease and Retirement

CASES

Facts• Eleazar Padillo was employed by the bank as its SA

Bookkeeper.

• Bank took out retirement/insurance plans for all its employees in anticipation of its possible closure.

• Bank procured an insurance life plan in favor of Padillo for a benefit amount to P100,000 which was set to mature on July 11, 2009.

• On October 14, 2004, respondent Mark Oropeza the President of the Bank, bought majority of stocks and took over its management


CASES

Facts• During the Latter part of 2007 Padillo suffered mild

stroke due to hypertension that impaired his ability to work.

• Padillo wrote a letter addressed to Oropeza expressing his intention to avail of an early retirement package, but his request remain unheeded.

• October 3, 2007, Padillo was separated from employment due to his poor and failing health. Not having received his claimed retirement benefits.


CASES

Facts• Padillo filed a complaint with the LA a complaint for the

recovery of unpaid retirement benefits. He asserted that the bank had adopted a policy of granting its aging employees early retirement packages.

• LA dismissed Padillo’s complaint but directed the bank directed to pay him the amount P100,000 as financial assistance.

• Padillo was disqualified to receive any benefits because he was 55 years old when he resigned.


CASES

Facts• Padillo elevated the matter to NLRC which reversed

and set aside the LA’s ruling.

• The NLRC applied the Labor Code provision on termination on the ground of disease, particularly Article 297 – holding that while Padillo did resign he did so only because of his poor health condition.

• It pronounced that separation pay on the ground of disease should not be given to Padillo because he was the one who initiated the severance of his employment.


CASES

Issue

Petitioner is entitled to

1. Separation pay

2. Retirement Benefits

Ruling

The labor code provision on termination on the ground of disease does not apply in this case. Considering that it was the petitioner and not the bank who severed the employment the employment relations.


CASES

Ruling

The clear import of Padillo’s letter and the fact that he stopped working before the foregoing date and never reported for work even thereafter show that it was Padillo who voluntarily retired and that he was not terminated by the Bank.

It is the employee who severs his employment ties, it necessarily follows that petitioner’s claim for separation pay must be denied.


CASES

Ruling

What remains applicable, however, is the Labor Code provision on retirement [Article 300]. Simply stated, in the absence of any applicable agreement, an employee must (1) retire when he is at least sixty (60) years of age and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of at least one-half (1/2) month salary for every year of service, with a fraction of at least six (6) months being considered as one whole year. Notably, these age and tenure requirements are cumulative and non-compliance with one negates the employee's entitlement to the retirement benefits.

THANK YOU!!!

authorized causes of termination

Law

casescomposite enterprises

month basis

one1 month

viajars termination

just causes

aseparation pay

redundancy gmc

continued employment