Category Archives: Labor Jurisprudence

Procedure for dismissing managerial employee due to loss of trust

Loss of trust is a legal ground for terminating the services of an employee particularly for employees holding managerial positions. To establish loss of trust, proof beyond reasonable doubt is not required. An employer may take steps to dismiss a managerial employee for as long as there is some basis for the loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the reported misconduct and his participation or involvement in the incident makes him unworthy of the trust of confidence demanded by his position.  Thus, in one case, the discovery of a falsehood in the application form of a  managerial employee where she claimed to be a CPA but in fact was not, is a ground constituting loss of trust.

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When It is Legal to Put An Employee on Floating Status

Situation:  An employee who was hired as project manager filed an emergency leave of absence and announced her intention to resign following her disappointment over the continued employment of another employee in the company.   Because of the importance of her role in the company’s only project at the time, the employer sought her replacement so as not to disrupt business.  The disgruntled employee, however, later changed her mind about leaving the company and decided to resume her work.  The employer informed her that because they were constrained to hire a replacement when she threatened to leave, she would have to be placed on “floating status” in the meantime.

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When an Employee with Undertime Works on Overtime

Should an employee who reported late for work and ended up working past his regular working schedule be paid overtime?

This is the usual question I get from employers who feel that the employee should make up for being late by extending his hours of work on the same day.

Philippine labor law prohibits the offsetting of undertime by rendering overtime.

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When Early Retirement is Valid

Can a company retire its employees at an early age?

The compulsory age of retirement is at 65 while optional retirement may start at age 60.  This does not prevent the company and its employees, however, from entering into contracts or agreements such as a CBA or employment agreement with early retirement provisions below the minimum ages set by law.

But for an early retirement plan to be legally defensible, the employees must have freely or voluntarily consented to the early retirement provision; otherwise, the early retirement may be considered invalid later in court as a form of illegal dismissal. 

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When is Neglect of Duty a Valid Ground for Termination?

Two things must exist and be proven before an employee can be terminated for neglect of duty.  Click here for the rest of this article found in the Legal Counseling blog.

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Legal Labor Options for Distressed Companies

Balancing financial survival and the rights of employees during economic downtimes can be tricky for companies whose primary concern is to keep the business afloat for the benefit of everyone– shareholders, employees and clients.

Philippine labor laws are typically favorable to the employee with more rights and labor standards deemed by many foreigners doing business in the Philippines as obstacles to business growth.  But what can a company do to save itself from financial ruin considering strict laws on termination and other labor standards?

Philippine Legal Counseling’s Atty. Christine Florido offers some legal suggestions. Click here to view the related article.

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Can Company Lower Age of Retirement of Employees?

Yes, provided it is found in the existing employment agreement or contract between the employer and employee.

The retirement age is primarily determined by the existing agreement or employment contract.  Absent such an agreement, the retirement age under Article 287 of the Labor Code will apply.  Article 287 mentions the age of at least 60 years but not over 65 years old as the retirement age of employees when there is no retirement plan or contract provision on the matter.

In fact, in a recent case decided by the Supreme Court, it ruled that:

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When Preventive Suspension is Justified

Preventive suspension is justified where the employee’s continued employment poses a serious and imminent threat to the life or property of the employer or of the employee’s co-workers.  Without this kind of threat, preventive suspension is not proper.

Case of : Jose P. Artificio vs. National Labor Relations Commission, RP Guardians Security Agency, Inc. Juan Victor K. Laurilla, Alberto Aguirre, and Antonio A. Andres, G.R. No. 172988, July 26, 2010

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Rules on Retrenchment in the Philippines

Retrenchment refers to the termination of employment initiated by the employer through no fault of and without prejudice to the employees.

It is resorted to during periods of:

  • business recession,
  • industrial depression,
  • seasonal fluctuations, 
  • lulls occasioned by lack of orders,
  • shortage of materials,
  • conversion of the plant to a new production program, or
  • automation

While labor laws allow retrenchment as a company’s valid exercise of management prerogative, it must comply with certain requirements for it to be valid:

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Are Dismissed Employees Entitled to Separation Pay?


By:  Atty. Elvin Villanueva

The common impression is that an employee who has been dismissed from service for cause is not entitled to any separation pay.

            This public notion is correct since it is the general rule when it comes to this issue. However, previous decisions allowed certain exceptions making the rule a little bit muddy.

In a recent decision by the Supreme Court, the rules on the payment of separation pay to validly dismissed employees were made clearer.

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