This document discusses just causes for termination of employment under Philippine labor law. It defines just causes as lawful grounds for dismissal directly attributable to the employee's fault or negligence. Some just causes discussed include serious misconduct, willful disobedience of lawful orders, neglect of duties, dishonesty resulting in loss of trust/confidence, and commission of a crime. The document also provides examples of court cases related to each just cause. It concludes with a summary of a Supreme Court case related to an employee's claim for retirement benefits upon separation from employment.

1. JUST CAUSES
Termination of
Employment
Edmar B. Cornejo

2. Management’s Rights
1.Right to Manage People in
General
2.Right to Discipline
3.Right to Transfer Employees
4.Right to Demote
5.Right to Dismiss – is a measure
of self protection

3. Just Causes – Under article 282 it is
called “dismissal” or “discharge”
those lawful or valid grounds for
termination of employment which arise
from causes directly attributable to the
fault or negligence of the erring
employee.

4. 1. JUST CAUSE : Serious Misconduct
transgression of some established and
definite rule of action, a forbidden act, a
dereliction of duty, willful in character and
implies wrongful intent and not error in
judgment
Examples of Misconduct
a) Pressure and Influence
b) Sleeping on Post, gross insubordination,
challenging superior to a fight
c) Sexual Harassment
Villarama vs NLRC and Golden Donuts Inc.,
G.R. No. 106341 September 2, 1994

5. d)Obscene Insulting or Offensive words against a
superior
e) Extra Marital Relationship as Immorality
Cause Found Inadequate
1. Fisticuffs
2. (1st Offense) Vending, soliciting, engaging in
usurious activities
Teacher in Love with Student: The heart has
the reason which reason does not know
Chua-Qua vs Hon. Jacobo C. Clave, et
al., G.R. No. L-495449, August 30, 1990

6. 2. JUSCT CAUSE : WILLFULL DISOBEDIENCE
The employees are bound to follow reasonable
and lawful orders of the employer which are in
connection with their work. Failure to do so may
be a ground for dismissal or other disciplinary
action.
Requisites to Concur Willful Disobedience
1. The employees Attitude (wrongful and perverse)
2. Qualities of Order (lawful and reasonable,
known to the employee and pertain to the duties
and responsibilities of employee.
Gold City Integrated Port Services, Inc. Vs
NLRC, et al., G.R. No. 86000, Sept.. 21, 1990

7. Willful Disobedience Cont….
Disobeying of a valid transfer order may
justify dismissal,
Disobeying of an invalid transfer order does
not
Valid transfer – the prerogative of the employer to
transfer the employees in the interest of the
efficient and economic operation of its business
Abbot Laboratories vs NLRC, G.R. No. 75659
October 12, 1987
Invalid Transfer – should not be used to
subterfuge by the employer to get rid of an
undesirable worker
Yuco Chemical Industries, Inc. vs Ministry of
Labor and Employment, et al., G.R. No 78656 May
28, 1990

8. Willful Disobedience Cont….
May an employee disobey and Inconvenient
transfer?
when the employee is opposing the transfer
on ground of inconvenience or hardship that the
transfer will cause to the employee or his family
Homeowrners Savings and Loan Association,
Inc. vs NLRC and M. Cabatbat G.R. No. 97067,
September 26, 1996
Escobin, et al. vs NLRC, Peftok Integrated
Services, Inc. (PISI), et al., G.R. No. 118159, April
15, 1998

9. Willful Disobedience Cont….
Change of Position of Work
Benguet Electric Cooperative vs J. Flanza G.R.
No. 158606 March 9, 2004
Test of Validity of Transfer
constructive dismissal exist when an act of
clear discrimination, insensibility or disdain by an
employer has become so unbearable to the
employee leaving him with no option but to forego
with his continued employment
Blue Dairy Corp. vs. NLRC and E.R. Recalde,
G.R. No. 129843 September 147, 1999

10. Willful Disobedience Cont….
Transfer with Promotion of a Manager
transfer becomes unenforceable if the
transfer is coupled with or is in the nature of a
promotion, where the promotion is rejected by
the employee.
Dosch vs. NLRC and Nortwest airlines, G.R.
No. 51182 July 5, 1983

11. 3. Just Cause : Neglect of Duties
the want or absence of or failure to exercise
slight care or diligence, or the entire absence of
care. It evinces a thoughtless disregard of
consequences without exerting any effort to
avoid them.
Gross Negligence – want or absence or
failure to exercise slight care or diligence or the
entire absence of care
Associated Bank vs. National Labor
Relations Commission, G.R. No. 86023, June 19,
1989
Abandonment - absent for a period of one
year and the prolonged absence was without
valid notice or leave from the company, which is
not by reason of illness or disease.

12. JUST CAUSE : NEGLECT OF DUTIES CONT……
Elements of Abandonment; Immediate Filing of
Complaint
1. Failure to report for work or absence without
valid or justifiable reason without any intention
of returning back
2. Clear intention to sever the employee employer
relationship
Labor et.al., vs NLRC and Gold City Commercial
Complex, Inc. and Uy, G.R. No. 110388,
September 14, 1995
Immediate filing of complaint negates
abandonment ; Exception

13. JUST CAUSE : NEGLECT OF DUTIES CONT……
Tardiness and Absenteeism
acts of insubordination, coupled with habitual
tardiness are sufficient causes for dismissal
Valid Dismissal Due to Unauthorized absence
Cando Vs NLRC and Filipinas Bank, G.R. No.
91344, September 14, 1990

14. JUST CAUSE : DISHONESTY, LOSS OF
CONFIDENCE
any act, omission, or concealment which
involves a breach of legal duty, trust, or confidence
justly reposed and is injurious to another
Falsification of Time Cards
San Miguel Corporation vs. NLRC, G.R. No.
82467 June 29, 1989
Theft of Company Property
Firestone Tire and Rubber Company of the
Philippines vs. Lariosa, G.R. No. 70479 February
27, 1987
Philippine Airlines, Inc. vs NLRC, et al., G.R.
No. 93934, June 30, 1989

15. Dishonesty Loss of Confidence Cont……
Loss of Confidence
an employer cannot be compelled to continue
in employment an employee guilty of acts inimical
to the interest of the employer and justifying loss of
confidence in him
Loss of Confidence apply to
1. Cases involving employees occupying positions
of trust and confidence (managerial employee)
2. Those situations where the employee is
routinely charged with care and custody of the
employer’s money or property. (cashiers,
auditors, property custodian, etc.)

16. Dishonesty Loss of Confidence Cont……
Conflict of Interest; Employment with
Competitor
as secretly engaging in a business which
renders him a competitor and rival of his employer.
It constitutes a breach of an implied condition of
the contract of employment.
Guidelines of Applying Loss of Confidence
1. Loss of Confidence should not be simulated
2. Should not be used as a subterfuge for causes
which are improper, illegal or unjustified
3. May not be arbitrarily asserted in the face o
overwhelming evidence to the contrary
4. Must be genuine
5. Employees involve should hold a position of
trust and confidence

17. JUST CAUSE : COMMISSION OF A CRIME
OR OFFENSE
Commission of a crime or offense by the
employee against his employer or any
immediate member of his family or his duly
authorized representative
Conviction or Prosecution Not Required
conviction of an employee in a criminal
case is not indispensable to warrant his
dismissal by his employer

18. ANALOGOUS CAUSES
To be considered analogous to the
just causes enumerated, however, a
cause must be due to the voluntary and
willful act or omission of the employee.

19. In a termination for just cause, due process
involves the two-notice rule:
a) A notice of intent to dismiss specifying the
ground for termination, and giving said
employee reasonable opportunity within
which to explain his or her side;
b) A hearing or conference where the
employee is given opportunity to respond to
the charge, present evidence or rebut the
evidence presented against him or her;
c) A notice of dismissal indicating that upon
due consideration of all the circumstances,
grounds have been established to justify
termination.

20. Case Study
G.R. No. 199338 : January 21, 2013
ELEAZAR S. PADILLO,
Petitioner,
v.s
RURAL BANK OF NABUNTURAN, INC.
and
MARK S. OROPEZA,
Respondent.

21. •On October 1, 1977 Padillo was employed with
Rural Bank in Nabunturan, Incorporated,
Nabunturan, Compostela Valley Province.
•In 2003, the bank had experienced liquidity
problems prompting the company to procure
insurance plans from Philam Life for its employees
amounting to P100,000. The plan would mature on
July 11, 2009
•On October 14, 2004, the bank was taken over by
Mark Oropeza who bought majority shares of
stocks and became the president of the bank. With
Oropeza’s management, the bank’s finances had
improved and regained its liquidity.

22. •But in 2007, Padillo suffered a mild stroke and he
was diagnosed having hypertension which already
affected his work.
•On September 10, 2007 Padillo then wrote a letter
to Oropeza expressing his intention to avail of the
bank’s early retirement package but despite several
follow-ups, his letter “remained unheeded”.
•On October 3, 2007 Padillo was separated from
his employment without affording him any
retirement benefits prompting him to file a labor
case before the NLRC Regional Arbitration Branch
XI in Davao City.

23. •Padillo asserted that the bank had adopted a
policy of granting its aging employees early
retirement packages, pointing out Nenita Lusan,
was accorded with Php. 348,672.oo when she
retired at the age of 53.
•Answering the charges hurled by Padillo, the bank
and Oropeza countered that Padillo’s claim of
retirement benefits “was not favorably acted upon
for lack of any basis to grant the same

24. •In a decision on March 13, 2009, the labor
arbitration office dismissed Padillo’s claim ruling
that he was disqualified from demanding
retirement benefits pursuant to Article 300 of the
Labor Code of the Philippines as he was only 55
years of age, five years short of the law’s prescribed
plan, retirement age of 60 and 10 years short of
compulsory requirement 65 .
The labor arbitration office, however, ordered
the bank to pay P100,000 as advance payment
from the amount receivable from Philam Life

25. •On December 29, 2009 Padillo elevated the labor
arbiter’s findings before the NLRC, which reversed
the decision and granted P164,903.70 on top of the
P100,000 he would get from Philam Life.
• On June 28, 2011 The NLRC decision was later
reversed by the Court of Appeals but with
modification to pay Padillo the amount of P50,000
as financial assistance in addition to the P100,000
from Philam Life
The CA awarded the amount to Padillo for
consideration of his 29 years of service with no
derogatory record in the company.

26. •Not satisfied with the CA decision, Padillo raised
the issue before the Supreme Court.
•But before the Supreme Court could hand down
its decision, Padillo died on February 24, 2012 and
the case was pursued by his heirs.

27. Padillo did not reach the retirement age
No established company policy for retirement of
aging employees was proven
Disease as ground for termination shall not apply
because it was Padillo who severed the
employment and not the bank borne from the
letter that he voluntarily retired and was not
terminated by the bank. Separation pay must be
denied.
The Petition was Partially Granted
In a decision promulgated on January 21,
2013, the SC agreed with the CA ruling that Padillo
could not get retirement benefits pursuant to law
but the High Court increased the amount awarded
to Padillo from P50,000 to P75,000 in addition to
the P100,000 from Philam Life.

28. SOURCES
Azucena Jr. C.A. (2010) The Labor Code with Comments and
Cases. (pp. 748- 785) Volume II, 7th Edition. Rex
Bookstore
Supreme Court Reports Annotated. Volume 689. Central Book
Supply Inc.
G.R. No. 199338 : January 21, 2013 Eleazar S.
Padillo,** Petitioner, V.S Rural Bank Of Nabunturan, Inc.
And Mark S. Oropeza, Respondent pdf. Retrieved on
August 30, 2014 from
http://sc.judiciary.gov.ph/jurisprudence/2013/january2
013/199338.pdf
Uracion R.U. , Bureau of Labor Relations. (2014) Retrieved
August 30, 2014 from
http://www.blr.dole.gov.ph/index.php/faqs/termination-of-
employment