Consequences of Termination

Group 6: Camacho, Ferrer, Go, Garcia, Limpo, Ngo, Roque

Indemnity
the obligation [or duty] resting on one person to make good any loss or damage another has incurred or may incur by acting at his request for his benefit
BARRONS LAW DICTIONARY, 264 (6th ed. 2010)

When applicable:
When there is valid cause of termination, but invalid procedure When beyond the 30-day preventive suspension C A ,E ' L C 335 (2010).
ES ZUCENA VERYONE S ABOR ODE

Requisite for Valid Termination

Just cause Due process

CES AZUCENA, EVERYONE'S LABOR CODE 332 (2010).

Wenphil Doctrine:
When the employee is dismissed for a valid reason yet the employer fails to comply with the proper dismissal procedure, the dismissal may still be deemed valid but the employer stands to pay indemnity Extent of indemnity: facts of the case and the gravity of the omission
CES AZUCENA, EVERYONE'S LABOR CODE 333 (2010).

Serrano vs. NLRC

If proper procedure is not observed, the employee is still dismissed but the employer shall pay his full backwages (from the time of his dismissal to the finality of the courts decision).

CES AZUCENA, EVERYONE'S LABOR CODE 334 (2010).

Agabon vs. NLRC

Not observing the proper procedure, the employer shall pay higher indemnity in form of nominal damages (middle ground) rather than full backwages. The amount is not fixed but depends on the gravity of the employers disregard for the procedural due process Includes separation pay if under Articles 283 and 284. C A ,E ' L C 334 (2010).
ES ZUCENA VERYONE S ABOR ODE

JAKA Food Processing Corp. vs. Pacot, et al.

If the dismissal is based on just cause, the liability of the employer is more lenient than in the case where the dismissal is based on the authorized causes under Article 283.

CES AZUCENA, EVERYONE'S LABOR CODE 335 (2010).

Valid Cause, Invalid Procedure

There is still an on going debate on the liability of the employer in failure to observe procedural due process.

CES AZUCENA, EVERYONE'S LABOR CODE 335 (2010).

Preventive Suspension
Imposed where the employees continued employment poses a serious and imminent threat to the life or property of the employer or of the co-workers If it exceed the maximum period of 30 days, the employer will be required to pay the employees pay and benefits, and may be required to pay indemnity
CES AZUCENA, EVERYONE'S LABOR CODE 335 (2010).

Reinstatement
restore to a former state, authority, station from which one has been removed
BARRONS LAW DICTIONARY, 453 (6th ed. 2010)

There is no break in the length of service of the employee There is no loss of seniority rights and other privileges One of the usual consequences in cases of illegal dismissal Reinstatement immediately executory
CES AZUCENA, EVERYONE'S LABOR CODE 344-45 (2010).

Reinstatement
Payroll reinstatement
Instead of actual reinstatement, employer may opt to only include the employee in the payment of wages and benefit without having to actually report for work

Ted Ferrolino, Payroll Reinstatment, available at http://www.laborlaw.usclaw.org/2009/08/03/payroll-reinstatement/ (last accessed December 6, 2011)

Reinstatement
Payroll reinstatement
Allowed in cases of
preventive suspension and, under Article 223 of the Labor Code (LC), where the Labor Artbiter ordered reinstatement with the option of payroll reinstatement

Not allowed in cases of Labor Dispute (Article 263 par. g) --- return to work order
Ted Ferrolino, Payroll Reinstatment, available at http://www.laborlaw.usclaw.org/2009/08/03/payroll-reinstatement/ (last accessed December 6, 2011)

Reinstatement
When applicable:
In cases of dismissal as punishment deemed to be too harsh Illegal retrenchment
Requisites for Valid Retrenchment:
substantial losses, imminent loss, reasonably necessary, sufficient and convincing evidence

Instead of reinstatement, separation pay may be paid (employees decision)

a months pay for every year of service
CES AZUCENA, EVERYONE'S LABOR CODE 336, 340 (2010).

Reinstatement
When not applicable:
Strained Relations Principle
Instead of reinstatement, separation pay, along with backwages, would be ordered by the court Applicable in cases where
the employee holds a position imbued with trust and confidence of the employee, and the creation of an atmosphere of antipathy and antagonism may be generated that would negatively affect the employee (as a result of reinstatement)

CES AZUCENA, EVERYONE'S LABOR CODE 345 (2010).

Damages
monetary compensation which the law awards to one who has been injured by the action of the other; to recompense for a legal wrong
BARRONS LAW DICTIONARY, 135 (6th ed. 2010)

When applicable:
Absence of due process / defective procedure

CES AZUCENA, EVERYONE'S LABOR CODE 326-50 (2010).

Damages
Labor Arbiter and the NLRC can impose damages as sanction:
Section 9. Article 217 of the same code, as amended, is hereby further amended to read as follows: "Article 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as otherwise provided under this Code, the Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide... the following cases involving all workers, whether agricultural or non-agricultural: ... (4) Claims for actual, moral, exemplary and other forms of

damages arising from the employer-employee relations...

AN ACT TO EXTEND PROTECTION TO LABOR, STRENGTHEN THE CONSTITUTIONAL RIGHTS OF WORKERS TO SELFORGANIZATION, COLLECTIVE BARGAINING AND PEACEFUL CONCERTED ACTIVITIES, FOSTER INDUSTRIAL PEACE AND HARMONY, PROMOTE THE PREFERENTIAL USE OF VOLUNTARY MODES OF SETTLING LABOR DISPUTES, AND REORGANIZE THE NATIONAL LABOR RELATIONS COMMISSION, AMENDING FOR THESE PURPOSES CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, APPROPRIATING FUNDS THEREFORE AND FOR OTHER PURPOSES, art.2 17(1989).

Damages
Types of Damages in Dismissal Cases
Moral damages
include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury...proximate result of the defendant's wrongful act for omission. (Article 2217 of the Civil Code)

Recoverable in cases of:

Bad faith Oppressive acts against labor Acts against labor contrary to morals, good customs or public policy

(Reaffirmed in the Eastern Shipping Lines, Inc. Vs. Ferrer D. Antonio, G.R. No. 171587)

CES AZUCENA, EVERYONE'S LABOR CODE 348 (2010).

Damages
Types of Damages in Dismissal Cases
Exemplary damages
imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. (Art. 2229 of the Civil Code) cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated. (Art.2233 of the Civil Code) Recoverable when the dismissal was effected in a wanton, oppressive or malevolent manner
CES AZUCENA, EVERYONE'S LABOR CODE 348 (2010).

Attorneys Fees
Recoverable in cases of dismissal involving bad faith, whimsicality and oppression
Award of attorney's fees when employee is forced to sue. - It is settled that in actions for recovery of wages or where an employee was forced to litigate and has incurred expenses to protect his rights and interests, even if not so claimed, an award of attorney's fees equivalent to ten percent (10%) of the total award is legally and morally justifiable.
Joselito Guianan Chan, Labor Laws of the Philippines, available at http://www.chanrobles.com/PART3.pdf (last accessed December 6, 2011)

Financial Assistance
Sometimes referred to as separation pay
Different from the separation pay required under Articles 283 and 284 (authorized causes).

Based on compassion and social justice

CES AZUCENA, EVERYONE'S LABOR CODE 348 (2010).

Financial Assistance
May be required in the ff. cases:
Valid dismissal with causes not relating to the employees moral character or serious misconduct In consideration of the long years of service, age, and economic status of the employee

CES AZUCENA, EVERYONE'S LABOR CODE 348 (2010).

Financial Assistance
Not applicable in the cases of termination due to just causes, involving moral turpitude or a question on the moral character of the employee, without prejudice to his other rights and privileges in the CBA
See Omnibus Rules Implementing the Labor Code, Book VI, Rule I, Section 7 Reaffirmed in Juliet Apacible vs. Multimed Industries, et al., G.R. No. 178903, May 30, 2011

CES AZUCENA, EVERYONE'S LABOR CODE 348 (2010).

Financial Assistance
Computation:
Include basic pay, transportation and emergency living allowances (must be regular)

CES AZUCENA, EVERYONE'S LABOR CODE 348 (2010).

Financial Assistance
Recent cases that where Financial Assistance was granted:
Eastern Shipping Lines, Inc. vs. Ferrer D. Antonio, G.R. No. 171587, Oct. 13, 2009
Financial Assistance in lieu of retirement benefits (since the petitioner did not qualify for the retirement benefits)

Romeo Villaruel vs. Yeo Han Guan, June 1, 2011

Financial assistance in lieu of separation pay (since the petitioner did not qualify for separation pay)

Juliet Apacible vs. Multimed Industries, et al., G.R. No. 178903, May 30, 2011
Financial assistance not given due to termination with just causes

***cases accessed vis www.lawphil.net

Sources
PRIMARY AUTHORITIES
Codes and Statutes
An Act To Extend Protection To Labor, Strengthen The Constitutional Rights Of Workers To Self-organization, Collective Bargaining And Peaceful Concerted Activities, Foster Industrial Peace And Harmony, Promote The Preferential Use Of Voluntary Modes Of Settling Labor Disputes, And Reorganize The National Labor Relations Commission, Amending For These Purposes Certain Provisions Of Presidential Decree No. 442, As Amended, Otherwise Known As The Labor Code Of The Philippines, Appropriating Funds Therefore And For Other Purposes, art.2 17(1989). A Decree Instituting A Labor Code Thereby Revising And Consolidating Labor And Social Laws To Afford Protection To Labor, Promote Employment And Human Resources Development And Insure Industrial Peace Based On Social Justice (1974) [hereinafter Labor Code]. An Act to Ordain And Institute The Civil Code Of The Philippines (1949) [hereinafter Civil Code]. Omnibus Rules Implementing the Labor Code, Book VI, Rule I, Section 7. Eastern Shipping Lines, Inc. vs. Ferrer D. Antonio, G.R. No. 171587, in Oct. 13, 2009, available at http://www.lawphil.net/judjuris/juri2009/oct2009/gr_171587_2009.html. Juliet Apacible vs. Multimed Industries, et al., G.R. No. 178903, May 30, 2011, available at http://www.lawphil.net/judjuris/juri2011/may2011/gr_178903_2011.html. Romeo Villaruel vs. Yeo Han Guan, June 1, 2011, available at http://www.lawphil.net/judjuris/juri2011/jun2011/gr_169191_2011.html.

Cases

SECONDARY AUTHORITIES BOOKS

BARRONS LAW DICTIONARY, 135 (6th ed. 2010) CES AZUCENA, EVERYONE'S LABOR CODE (2010). Joselito Guianan Chan, Labor Laws of the Philippines, available at http://www.chanrobles.com/PART3.pdf (last accessed December 6, 2011) Ted Ferrolino, Payroll Reinstatment, available at http://www.laborlaw.usc-law.org/2009/08/03/payroll-reinstatement/ (last accessed December 6, 2011)

Internet Sources