‘You are fired!’

‘You are fired!’ "Employers’ rights should also be respected and protected by the State in the interest of fairness."



Every so often we hear employees being fired unceremoniously by their employers. An employee cannot be terminated because of his unacceptable family background or timid personality; nor can he be fired because he is more personable than the employer, or performs better than the employer’s child who is also working for him or her.  

The right to terminate employee springs from the existence of an employer-employee relationship. In the absence of such a relationship, there is nothing to end. Aside from the power to dismiss, the following factors should also be established by competent evidence: (1) the selection and engagement of the employee; (2) the payment of wages; and (3) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished.

The engagement is established by a written or oral contract between the employer and employee. This satisfies the requirement of selection and hiring of the employee. Relevant evidence to prove the relationship may be admitted, such as identification cards, cash vouchers, social security registration, appointment letters or employment contracts, payrolls, organization charts, and personnel lists, among others (Marsman and Company v. Sta. Rita, G.R. No. 194765, April 23, 2018).

The payment of wages is another indicator of the employer-employee relationship. This is evidenced by payslips, paychecks or amounts of money credited in the employee’s bank account. The wages may also be paid without the accompanying documents that show the employee’s entitlement to the compensation; but it is always best to have the salary payments documented.  

There is a notion that employees must work from eight in the morning to five in the afternoon to be entitled to wages. This is known as straight-hour wage payment, wherein employees are paid on a monthly, bimonthly or weekly basis. This is distinguished from the “pakyaw” or task-based engagement which is reckoned in terms of the completion of work and not in terms of the amount of time spent to complete the work (David v. Macasio, G.R. No. 195466, July 2, 2014). Once the work or task is completed, the worker receives a fixed amount as wage, without regard to the standard measurements of time generally used in pay computation. Hence, the nature of the engagement on "pakyaw" or task basis does not determine the parties’ employer-employee relationship as it is simply a method of pay computation (David v. Macasio, G.R. No. 195466, July 2, 2014).

However, the most determinative factor in ascertaining the existence of an employer-employee relationship is the right of control test. Under this control test, the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the means by which such an end is reached (Valerosa v. Skycable, G.R. No. 202015, July 13, 2016). There is no power of control to give rise to an employer-employee relationship if the complainant was never subject to definite working hours; goes to work and leaves as he pleases; and goes on leave without seeking approval from the officers of the company. The Supreme Court has held the view that where the supposed employee is not subject to a set of rules and regulations governing the performance of his duties with the company, such relationship does not exist (Reyes v. Glaucoma Research Foundation, G.R. No. 189255, June 17, 2015).

The employer-employee relationship may be terminated for a number of reasons. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer are valid grounds for termination. It is the transgression of some established and definite rule of action, commission of a forbidden act, or a dereliction of duty which is willful in character, and implies wrongful intent and not a mere error in judgment (Nissan Motors v. Angelo, G.R. No. 164181, September 14, 2011).

In the Nissan Motors case, the Supreme Court found evidence to support the allegation of serious misconduct or insubordination against an employee who used in his Letter-Explanation language that is akin to a manifest refusal to cooperate with company officers, and resorted to conduct which reeks of outright disrespect and willful defiance of authority or insubordination.

An employee can also be terminated for gross and habitual neglect of his duties. Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending on the circumstances (Nissan Motors v. Angelo, G.R. No. 164181, September 14, 2011).

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever the employer-employee relationship (Protective Maximum Security Agency v. Fuentes, G.R. No. 169303, February 11, 2015 citing Agabon v. NLRC).

Abandonment constitutes a just cause for dismissal because "[t]he law in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer." The employer cannot be compelled to maintain an employee who is remiss in fulfilling his duties to the employer, particularly in the fundamental task of reporting to work (Protective Maximum Security Agency v. Fuentes, G.R. No. 169303, February 11, 2015).

Another reason to terminate an employee is the latter’s defrauding or willful breaching of the trust reposed in him by his employer. This is founded on the fact that the employee concerned, e.g. managerial personnel, is trusted with and vested with powers and prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees (Panaligan v. PHYVITA Enterprises, G.R. No. 202086, June 21, 2017).

It is also possible that the employee is routinely charged with the care and custody of the employer's money or property, as is the case for cashiers, auditors, property custodians, or those who, in normal and routine exercise of their functions, regularly handle significant amounts of money or property. In any of these situations, it is the breach of the trust that the employee’s position holds which results in the employer's loss of confidence (Panaligan v. PHYVITA Enterprises, G.R. No. 202086, June 21, 2017).

Dismissal from employment has two facets that must be established: first, the legality of the act of dismissal, which constitutes substantive due process; and second, the legality of the manner of dismissal, which constitutes procedural due process (Maula v. Ximex Delivery Express, G.R. No. 207838, January 25, 2017). The substantive due process must show that the termination of the employee was made for a lawful cause or that the termination of employment was valid.

On the other hand, to comply with procedural due process, the employer must furnish the employee a written notice containing the specific grounds or causes for dismissal. The notice must also direct the employee to submit his or her written explanation within a reasonable period from the receipt of the notice. Afterward, the employer must give the employee ample opportunity to be heard and defend himself or herself (Bravo v. Urios College, G.R. No. 198066, June 7, 2017). Both the substantive and procedural requirements must be complied with to prevent suits of illegal dismissal against the employer.  

A formal hearing is not mandatory in termination cases unless required under company rules or when the employee requests for it. According to the Supreme Court, "to be heard" does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations, submissions or pleadings. Therefore, while the phrase "ample opportunity to be heard" may in fact include an actual hearing, it is not limited to a formal hearing only (Bravo v. Urios College, G.R. No. 198066, June 7, 2017).

The right to terminate or end the employment is not limited to the employer. An employee may terminate without just cause the employee-employer relationship by serving a written notice to the employer at least one (1) month in advance. This is more popularly known as resignation. Failure on the part of the employee to give such notice to the employer may make him liable for damages to the latter (Article 300, Labor Code of the Philippines).

An employee may decide to terminate the relationship without the need for serving any notice if the employer commits serious insults to the honor and person of the employee. This also applies when inhuman and unbearable treatment is accorded the employee, or when there is commission of a crime or offense by the employer or his representative against the person of the employee or any of his immediate family members (Article 298, Labor Code of the Philippines).

While the Philippine Constitution declares that “[T]he State affirms labor as a primary economic force… protect[ing] the rights of the workers and promot[ing] their welfare,” we should be mindful that the employers play an important role in nation-building and in developing a self-reliant economy.  For this reason, employers’ rights should also be respected and protected by the State in the interest of fairness.

Topics: employee , labor , fire , Nissan Motors , Supreme Court
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