DO NO.

147-15 necessity and exigencies of (BCI)

1. business,
2. changing economic conditions, and
SECURITY OF TENURE 3. illness of the employee.
No person shall be terminated
Except for (JAD) TERMINATION BASED ON AUTHORIZED CAUSES
1) just and The requirements of due process
2) authorized causes shall be deemed complied with
3) and upon observance of due process upon service of a written notice
1) to the employee and
COVERAGE 2) to the appropriate RO of the DOLE
The rules shall apply to at least 30 days before
1) all parties of work arranngements the effectivity of the termination,
a. where ER-EE relationship specifying the ground/grounds for
exists termination.
2) all parties to legitimate contracting/ KINDS OF AUTHORIZED CAUSES (IRR-CD)
subcontracting arrangements 1) installation of labor saving devices
with existing ER-EE 2) redundancy
relationships 3) retrenchment/downsizing
ER-EE RELATIONSHIPS 4) closure or cessation of operation
To ascertain existence of ER-EE relationship 5) disease
the 4-fold test shall apply, to wit: (SP-DC)
1. the selection and engagement of INSTALLATION OF LABOR SAVING DEVICES
the EE The ff must be present: (IG-PNC)
2. the payment of wages 1) introduction of
3. the power of dismissal machinery
4. the power to control EEs conduct equipment or
(control test). other devices
most crucial and 2) introduction done in good faith
determinative indicator 3) purpose of introduction must be
Under the control test, valid, i.e.,
an EE-ER relationship exists to save on cost
where the person for whom the services are enhance efficiency
performed other justifiable economic
reserves the right to control reasons
not only the end achieved 4) no other option available
but also the manner and means used to the employer
to achieve that end. than the introduction of
machinery, equipment or
AN EMPLOYEE MAY BE TERMINATED BASED ON: device
Authorized Causes and the consequent
Just Causes termination of employment
Reasonable and lawful grounds specified in of those affected thereby
COMPANY POLICIES 5) fair and reasonable criteria
Grounds provided for under the CBA in selecting employees to be
terminated.
AUTHORIZED CAUSES Separation pay, equivalent to
These are the causes brought by o at least 1 month pay
 o or at least 1 month pay for every 1) reasonably necessary and
year of service likely to prevent business
o whichever is higher losses
o a fraction of 6 mos. service is 2) losses
considered 1 whole yr. if already incurred
LIFO shall apply not de minimis, but
o except when an EE volunteers to be substantial,
separated from employment serious,
actual, and
REDUNDANCY real, or
The ff must be present: if only expected
1) superfluous positions/services of are reasonably
EEs imminent
2) positions/services are in excess 3) expected/actual losses must be
of what is reasonably proved
demanded by sufficient and convincing
by the actual requirements evidence
of the enterprise 4) retrenchment must be in good faith
to operate in an economical for the advancement of its
and efficient mannder interest
3) good faith in abolishing redundant and not to defeat or
positions circumvent
4) fair and reasonable criteria the EEs right to security of
in selecting EEs to be tenure.
terminated 5) fair and reasonable criteria in
5) adequate proof of redundancy, i.e. determining who would be
new staffing pattern dismissed or retained, i.e.
feasibility studies/proposal status
on the viability of the efficiency
newly created seniority
positions physical fitness
job descriptions age
approval by the management financial hardship
of the restructuring Separation pay, equivalent to:
(same as Installation) Separation paid shall o 1 month pay
be paid by ER equivalent to o or at least month pay for every yr
o at least 1 month pay of service
o or at least 1 month pay for every o whichever is higher
year of service o a fraction of 6 mos. service is
o whichever is higher considered 1 whole yr.
o a fraction of 6 mos. service is LIFO shall apply
considered 1 whole yr. o except when an EE volunteers to be
LIFO shall apply separated from employment
o except when an EE volunteers to be
separated from employment

RETRENCHMENT/DOWNSIZING
The ff must be present:
CLOSURE/CESSATION OF OPERATIONS o retrenchment
The ff must be present: (DGN) o closure/cessation of business, if not
1) decision to close or cease operation due to serious business losses
by the management otherwise, SP not required
2) decision made in good faith o disease
3) no other option available
Where closure is due to serious business JUST CAUSES
losses causes directly attributable
o or financial reverses to the fault or negligence
o NO SEPARATION PAY is required of the EE
Where closure is NOT due to serious
business losses TERMINATION BASED ON JUST CAUSES
o Separation pay is equivalent to: requires 2 written notices served on EE
1 month pay 1) First written notice, should contain
or at least month pay for a) specific causes or grounds for
every yr of service termination,
whichever is higher and company policies,
if any
DISEASE b) detailed narration of facts
The ff must be present: and circumstances
1) EE must be suffering from any that will serve as
disease basis for the charge
2) Continued employment is prohibited against EE
by law c) a directive that the EE is
or prejudicial to given opportunity to submit
his/her health, and a written explanation with a
to health of his/her reasonable period
co-EEs ample opportunity to
3) Certification by a competent public be heard
health authority that o any opportunity,
the disease is incurable verbal or written
within a period of 6 to answer the
mos charges
even with proper medical and submit
treatment evidence
Separation pay, equivalent to: in support of
o 1 month pay defenses.
o or at least month pay for every yr o a formal hearing or
of service conference is
o whichever is higher mandatory only
o a fraction of 6 mos. service is when
considered 1 whole yr. requested by EE
in writing
NOTE: Authorized causes- separation pay required substantial
higher 1 mo. or 1 mo./yr of service: evidentiary
o installation of labor-saving devices disputes exist
o redundancy
higher 1 mo. or mo./yr of service:
 company 3) order violated must be (RLK)
rule/practice a. reasonable
requires it b. lawful
when similar c. and made known to EE
circumstances 4) order must pertain to the duties which he
justify it. has been engaged to discharge
reasonable period
o @ least 5 calendar GROSS AND HABITUAL NEGLECT OF DUTIES (NG)
days 1) there must be neglect of duties
o from receipt of 2) negligence must be gross and habitual in
notice character.
2) Notice of termination, must indicate
that: FRAUD OR WILLFUL BREACH OF TRUST: (ABAW)
a) all circumstances involving 1) there must be an: (AOC)
the charge a. act
have been considered b. omission, or
b) the grounds have been c. concealment
established 2) AOC involves breach of: (LTC)
to justify the a. legal duty
severance of their b. trust or
employment c. confidence justly reposed
Notices shall be served: 3) committed against ER or his/her
1) personally to the EE or representative
2) to the EEs last known address 4) in connection with EEs work

KINDS OF JUST CAUSES (SWG-FLOA) LOSS OF CONFIDENCE (AJ-NNG)

1) serious misconduct 1) AOC
2) willful disobedience or insubordination 2) AOC justifies the loss of trust and
3) gross and habitual neglect of duties confidence of ER to EE
4) fraud or willful breach of trust 3) loss of trust and confidence NOT simulated.
5) loss of confidence 4) it should not be used as a subterfuge
6) commission of a crime or offense o for causes which are (IIU)
7) analogous causes a) improper
b) illegal, or
SERIOUS MISCONDUCT (MAPU) c) unjustified
1) there must be a misconduct 5) it must be genuine and not a mere
2) of such grave or aggravated character afterthought
3) relate to a performance of the EEs duties o to justify an earlier action taken in
4) showing that the EE becomes unfit to bad faith
continue working for ER
COMMISSION OF A CRIME OR OFFENSE (PA)
WILLFUL DISOBEDIENCE/INSUBORDINATION 1) Act or omission punishable/prohibited by
(DWOD) law
1) there must be disobedience or 2) AO committed against
insubordination a. ER,
2) that is willful or intentional b. any of immediate member of his/her
characterized by a wrongful or family, or (spouse, child/ren,
perverse attitude parents, bro/sis)
 c. his/her duly authorized
representative
ANALOGOUS CAUSES (SVE)
1) AO similar to those specified just causes
2) AO must be voluntary and/or willful
3) expressly specified as analogous in the
company rules and regulations
SEPARATION PAY FOR JUST CAUSES
GR: No separation pay
EX: expressly provided in
o company policy or
o CBA
COMPANY POLICIES, examples
Grounds:
o employee found positive for use of
dangerous drugs
dealt with administratively
ground for suspension or
termination
o sexual harassment
especially when inflicted
those with moral ascendancy
over victim
Not grounds:
o actual, perceived or suspected HIV
o actual perceived or suspected
Hepatitis B
o Tuberculosis
shall not be discriminated
against;
entitled to work for as long
as CERTIFIED
by the companys accredited
health provider
as medically fit
and shall be restored to work
as soon as illness is
controlled
FRAUD
AOC
involves breach of LTC
and is injurious to another
GROSS NEGLECT
absence of that diligence
that an ordinary prudent man
would use in his/her affairs
HABITUAL NEGLECT
repeated failure
to perform ones duties
over a period of time
INSUBORDINATION
refusal to obey some order
o which a superior is entitled to give
and have obeyed.
it is a willful or intentional disregard
o of the lawful and reasonable
instructions of the ER
INSTALLATION OF LABOR-SAVING DEVICES
reduction of the number of workers
made necessary by the introduction of labor
saving machinery or devices
LOSS OF CONFIDENCE
condition arising from
o fraud or willful breach of trust
o by employee
o of the trust reposed in him
o by his/her employer or ERs duly
authorized representative
2 classes of position of trust:
1) managerial employees
vested with the power
to lay down management
policies
2) employees that regularly handle
significant amounts of money or
property
auditors
property custodians
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 mere error in judgment o request shall be referred to
COMPULSORY ARBITRATION
REDUNDANCY o or if both parties agree, to VA.
condition when services of an employee
are in excess CONDITION PRECEDENT TO COMPULSORY
of what is reasonably demanded ARBITRATION
by the actual requirements no labor arbiter
of the enterprise shall take cognizance
or superfluous of the complaint for illegal dismissal
unless there is a referral from the DO.
RETRENCHMENT
economic ground NONCOMPLIANCE WITH SETTLEMENT
for dismissing EEs AGGREEMENT
to avoid or minimize 1) the terms of the settlement agreement
business losses o may be enforced
o by requesting the DO to refer the
MANDATORY CONCILIATION-MEDIATION ON same
TERMINATION DISPUTES o to the proper Regional Arbitration
(Presupposes estab. is unorganized) Branch (RAB)of the NLRC
Request for assistance form the Single Entry o for enforcement of agreement.
Assistance Desk Officers (SEADOs) [DOLE] o the same shall be docketed as
o on issues arising from termination of arbitration case for enforcement of
employment due to just or the settlement agreement
authorized cause 2) the ER/EE may also disregard the
In case of settlement DO shall: settlement agreement
1) reduce agreement to writing and file an appropriate case in the
2) have the parties understand the proper forum
contents
3) have them sign the same in his/her
presence, and
4) attest the doc to be the true and
voluntary act of the parties
For organized establishments:
o all disputes shall undergo grievance
machinery under the CBA.
o in case of failure to reach an
agreement,
parties may:
refer case to
conciliation-
mediation under
SEnA, or
agree to submit to VA

SETTLEMENT AGREEMENT
shall be final and binding.
in case of failure to reach an agreement
during the conciliation-mediation period