1. Just causes Maria D.

Makinis is employed as sales agent at the Baguio Branch of Beau Company, a manufacturer and distributor of various beauty soap products locally and abroad. Said products are branded as beau Original which gained reputation of being expensive but effective. As a sales agent, Marias task is to sell the said soap products at the companys store. As per company policy, she is also allowed to sell on commission basis outside the store after her working hours. Unknown to the company however, Maria has a Korean friend who supplies her with Korean beauty products which she labeled as beau original and sell it together with the companys products at a lower price. Often, what she does is to sell both products at a buy one take one basis whereby the consideration is 150% of the companys selling price. On one occasion, Maria sold both products on her buy one take one promo to Jasmine Sumbong who she did not know was her supervisors daughter. Said super visor has noticed the Korean soap labeled as Beau Original and due to her familiarization with the companys products, noticed immediately that it is not one of latters products. She brought the Korean soap to the company laboratory and verified it and indeed it is not one of their products. On query to Jasmine Sumbong, they learned that the same are being distributed by Maria. They conducted investigation and caught Maria actually selling said falsely labeled products together with the original products. Thereafter, Maria was directed to show cause to explain why she should not be dismissed for her fraudulent conduct. Instead, Maria did not report for work. Thus, the company issued a memorandum order terminating her contract on the ground of a gross violation of the companys rules and regulations. The company also filed separate criminal charges and a complaint for violation of the Intellectual Property law. On the other hand, Maria claims that prior to the said incident, she had filed complaint against the company management for alleged violation of the minimum wage law. She avers that she was dismissed for questioning the company. She also claims that selling the Korean products with the Beau original is her own strategy to increase her sales of the latter products and that said promo actually doubled her sales number which in turn benefited the company. She thus filed a complaint for illegal dismissal. The labor arbiter in deciding the case gave credence to Marias claim that her dismissal was based on the companys disfavor of her complaints against it. The national Labor Relations commission affirmed the decision of the Labor arbiter. On a petition for certiorari, the Supreme Court ruled that there is no illegal dismissal. The Court reasoned held that the employer had a

valid ground to terminate the services of Maria D. Makinis since there is an evident violation of the companys rules and regulations. It further held that the employer has right to dismiss employees whose continuance in the service is inimical to the emplo yers interest citing article 282 of labor code which enumerates the just causes for termination of an employees contract: Fraud or willful breach of the employee of the trust reposed in him by his employer or duly authorized representative.

2. Authorize causes Talk & talk is an academy licensed to operate in the Philippines. It renders online English tutorial services to foreign students, sixty percent (60%) of whom are Koreans. Said academy employs 150 Filipino teachers including Ms. Gina Makabayan who has been working with the academy for almost one year. Ms. Makabayan is the president of the employees union and is very active in promoting employees welfare including having dialogues with the academys management regarding their wage increase and other labor standard benefits. Meanwhile, Korea is engaged in war with the United States of America. To protect its national security and to prevent spying from the latter, Korea has ordered its citizens to stop corresponding to all countries allied to the US which includes the Philippines. This affected the business of the academy since 60% of its students who are Koreans stopped in engaging their services. So that on February 21, 2014, during her twelfth month in the academy, Ms. Makabayan and 50 other teachers, 20 of whom are active members of the employees union, were given notice of their dismissal. Thereafter, Ms. Makabayan filed a complaint for illegal dismissal claiming that the termination of her contract was based on her active involvement in asserting their rights as employees against the management. The management on the other hand avers that the termination of Ms. makabayans contract was based on the fact that the academy no longer need services of some of the teachers because of lack of students and retaining their services would be impractical and that the act of the management is legal based on art 284 of the labor code which provides:
ART. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay

equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to month pay or at least one-half (1/2) months pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

It further claims that basis of selecting the teachers whose contracts are terminated is the time they were employed and not on the basis of prejudice whatsoever. Since Ms. Makabayan is one of the earliest employed teachers, then she is included to the ones laid- off.
The Labor Arbiter in solving this issue held that there was no illegal dismissal since art 283 of the Labor code is clear on its provision explaining further that retrenchment is an economic ground to reduce the number of employees. Retrenchment is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business . It is sometimes also referred to as downsizing. It is aimed at saving a financially ailing business establishment from eventually collapsing. Indeed if there is no more work available, the academy cannot be compelled to retain services of the employees to its own detriment. What is essential is that it has given the labor standard benefits provided for by law. The NLRC agreed to the decision of the Labor Arbiter. The Supreme Court also affirmed said decision.
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