1. Due process cannot be dispensed with despite wider discretion in terminating managerial and confidential employees. Although employers have wider latitude of discretion in terminating a managerial employee, it is nonetheless settled that 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. Managerial employees, no less than rank-and-file laborers are entitled to due process.

    Resignation; Definition. Resignation is “the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment.” (Casa Cebuana Incorporada, et al. vs. Leuterio, G.R. No. 176040, September 4, 2009.)

  2. It is the employee’s burden to establish fact of dismissal. While the employer bears the burden in illegal dismissal cases to prove that the termination was for valid or authorized cause, the employee must first establish by substantial evidence the fact of dismissal from service. (Romero vs. Tri-Union International Corp., G.R. No. 176700, September 4, 2009.)
  3. Voluntary retirement distinguished from Involuntary retirement. Voluntary retirement cuts employment ties leaving no residual employer liability; Involuntary retirement amounts to a discharge, rendering the employer liable for termination without cause. The employee’s intent is the focal point of analysis. In determining such intent, the fairness of the process governing the retirement decision, the payment of stipulated benefits, and the absence of badges of intimidation or coercion are relevant parameters.

    Employment contracts generally bind the parties to their terms; Exceptions. Although contracts executed in the context of employment are imbued with public interest, triggering closer scrutiny, they remain contracts binding the parties to their terms. To excuse the employees from complying with the terms of their waivers, they must locate their case within any of three narrow grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. (Quevado, et al., vs. Benguet Electric Cooperative, et al., G.R. No. 168927, September 11, 2009.)

  4. Rules of procedure; Proper recourse from decision of the Court of Appeals. The proper recourse of an aggrieved party to assail the decision of the Court of Appeals is to file a petition for review on certiorari under Rule 45 of the Rules of Court. The Rules precludes recourse to the special civil action for certiorari if appeal, by way of a petition for review is available, as the remedies of appeal and certiorari are mutually exclusive and not alternative or successive. For a writ of certiorari to issue, a petitioner must not only prove that the tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction but must also show that he has no plain, speedy and adequate remedy in the ordinary course of law.

    Burden of proof in termination cases. In termination cases, the burden of proof rests upon the employer to show that the dismissal was for a just and valid cause and failure to discharge the same would mean that the dismissal is not justified and therefore illegal.

    Ibid.; Abandonment of work. To prove that the employee abandoned his work, it is incumbent upon the employer to prove: (1) that the employee failed to report for work or had been absent without valid or justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee relationship as manifested by some overt acts. The burden of proof to show that there was unjustified refusal to go back to work rests on the employer. (Tacloban Far East Marketing Corporation, et al. vs. Court of Appeals, et al., G.R. No. 182320, September 11, 2009.)

  5. Sleeping on duty and leaving work area as serious misconduct. Sleeping on the job without prior authorization was held to constitute serious misconduct and is a valid ground for dismissal. The court considered that the employee in this case (Tomada) was “directly responsible for a significant portion of his employer’s property.” Tomada’s act was not merely a disregard company rules, but in effect an open invitation for others to violate those same company rules.

    Court denies financial assistance despite employee’s long years of service. Although his nearly two decades of service might generally be considered for some form of financial assistance to shield him from the effects of his termination, Tomada’s acts reflect a regrettable lack of concern for his employer. If length of service justifies the mitigation of the penalty of dismissal, then this Court would be awarding disloyalty, distorting in the process the meaning of social justice and undermining the efforts of labor to cleanse its ranks of undesirables. (Eduardo M. Tomada, Sr., RFM Corporation, et. al, G.R. No. 163270 September 11, 2009.)

  6. Acceptance of award or benefit by individual members not a waiver of the union’s claim. Union members’ individual acceptance of the award and the resulting payments made by company does not operate as a ratification of the DOLE Secretary’s award; nor a waiver of their right to receive further benefits, or what they may be entitled to under the law. Necessitous men are not, truly speaking, free men; but to answer a present emergency, will submit to any terms that the crafty may impose upon them.

    CBA signing bonus presupposes successful negotiation. A signing bonus is a grant motivated by the goodwill generated when a CBA is successfully negotiated and signed between the employer and the union. When no CBA was successfully negotiated by the parties, there shall be no basis to allow an award of signing bonus.

    N.B. In this case, the court awarded signing bonus because the petitioner failed to question the original award of signing bonus despite unsuccessful negotiation. The court held thus: “A bonus is a gratuity or act of liberality of the giver; when petitioner filed the instant petition seeking the affirmance of the DOLE Secretary’s Order in its entirety, assailing only the increased amount of the signing bonus awarded, it is considered to have unqualifiedly agreed to grant the original award to the respondent union’s members.” (University of Santo Tomas vs. Samahang Manggagawa ng UST (SM-UST), G.R. No. 169940, September 14, 2009.)

  7. Requisites of a valid Retrenchment (to prevent losses). In order to justify retrenchment of employees as a measure to avoid or minimize business losses, the employer must satisfy certain established standards, all of which must concur, viz.:
    1. That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer;
    2. That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment;
    3. That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one half (1/2) month pay for every year of service, whichever is higher;
    4. That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and
    5. That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.

    Decrease in revenue not necessary business losses within the meaning of Article 283. Sliding incomes or decreasing gross revenues alone do not necessarily indicate business losses within the meaning of Article 283, for, in the nature of things, the possibility of incurring losses is constantly present in business operations. The employer must prove the stringent requirement that the loss was substantial, continuing and without any immediate prospect of abating.

    Retrenchment should only be resorted after less drastic measures have failed. Retrenchment should only be resorted to when other less drastic means, such as the reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiency, reduction of marketing and advertising costs, faster collection of customer accounts, reduction of raw materials investment and others, have been tried and found to be inadequate. (Bio Quest Marketing Inc., et al. vs. Edmund Rey, G.R. No. 181503, September 18, 2009.)

  8. POEA Standard Employment Contract; Seafarers who died during employment entitled to death benefits; Exception. The general rule is that the employer is liable to pay the heirs of the deceased seafarer for death benefits once it is established that he died during the effectivity of his employment contract. However, the employer may be exempted from liability if he can successfully prove that the seafarer’s death was caused by an injury directly attributable to his deliberate or willful act. (Great Southern Maritime Services, Inc., et al. vs. Leonila Surigao, et al., G.R. No. 183646, September 18, 2009.)
  9. Appeal from decision of Labor Arbiter; Appeal bond mandatory. The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a mandatory requisite for the perfection of an appeal by the employer as inferred from the provision that an appeal by the employer may be perfected “only upon the posting of a cash or surety bond.”

    Ibid.; Appeal bond also a jurisdictional requirement. The filing of the bond is not only mandatory but a jurisdictional requirement as well, that must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of the Labor Arbiter final and executory.

    Ibid.; Purpose of appeal bond. Appeal bond is intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. It is intended to discourage employers from using an appeal to delay or evade their obligation to satisfy their employees’ just and lawful claims.

    Ibid.; Requirements for reduction of appeal bond. The bond may be reduced upon motion by the employer subject to the following conditions viz. (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. (Andrew James Mcburnie vs. Eulalio Ganzon, et al., G.R. Nos. 178034 & 178117; G.R. Nos. 186984-85, September 18, 2009.)

  10. Entitlement to retirement benefits of previously resigned employees. Entitlement of employees to retirement benefits must specifically be granted under existing laws, a collective bargaining agreement or employment contract, or an established employer policy. In this case, no law or collective bargaining agreement or other applicable contract, or an established company policy was existing during the employees’ (respondents’) employment entitling them to the P200,000 lump-sum retirement pay. The company (petitioner) was not thus obliged to grant them such pay.

    Binding effect of quitclaims executed by employees. While quitclaims executed by employees are commonly frowned upon as being contrary to public policy and are ineffective to bar claims for the full measure of their legal rights, where the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding undertaking. (Kimberly-Clark Philippines, Inc. vs. Nora Dimayuga, et al., G.R. No. 177705, September 18, 2009.)

  11. Termination of employment; Abandonment; Burden of proof. Abandonment is a form of neglect of duty, one of the just causes for an employer to terminate an employee. It is a hornbook precept that in illegal dismissal cases, the employer bears the burden of proof. For a valid termination of employment on the ground of abandonment, employer must prove, by substantial evidence, the concurrence of employee’s failure to report for work for no valid reason and his categorical intention to discontinue employment. (Odilon L. Martinez vs. B&B Fish Broker, G.R. No. 179985, September 18, 2009.)
  12. POEA Standard Employment Contract; Disability benefit under Section 20(B); Requirements. A seafarer may claim disability benefits under Section 20(B) of the 1996 POEA Standard Contract of Employment for Seafarers (Contract) only if he suffers a work-related injury or illness during the term of his contract. In this case, respondent admitted that he had been previously diagnosed with diabetes four years before he was engaged by petitioners as chief cook of M/V White Arrow. Clearly, he was not afflicted with the said illness only during the term of his contract but even prior to his employment. He did not even complain of any complications of the disease at any time during his employment. Moreover, even assuming respondent contracted the disease during the term of his contract, he was precluded from claiming disability benefits for his failure to comply with Section 20(B)(3) of the Contract. The provision requires a claimant to submit himself to a company-designated physician three days after his arrival in the Philippines for medical examination and failure to do so bars the filing of a claim for disability benefits. Neither is respondent entitled to disability benefits under Section 32-A of the Contract since diabetes is not one of the compensable occupational diseases listed there. (Bandila Maritime Services, Inc., et al. vs. Rolando Dubduban, G.R. No. 171984, September 29, 2009.)

Last Edited: Friday, August 19, 2011

Caveat: Subsequent court and administrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.
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