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Security of Tenure

Security of Tenure is one of the fundamental principles enshrined in Philippine labor law, guaranteeing that employees cannot be dismissed from their employment except for just or authorized causes, as outlined in the Labor Code of the Philippines and other relevant laws. This provision ensures that workers are not arbitrarily terminated and that they are entitled to due process before losing their job.

 

Article 280 of the Labor Code:
This provision defines regular employees and establishes the principle of security of tenure. According to the law, a worker who has been employed for a definite period or has rendered service for a period of at least one year becomes a regular employee. Regular employees cannot be dismissed except for just causes (as outlined in Article 297) or authorized causes (as outlined in Article 298).
Agabon v. National Labor Relations Commission (G.R. No. 158693, November 17, 2004)
Facts: In this case, the Supreme Court dealt with the validity of dismissals made without due process, even though the employer's reason for termination was a just cause (the employee was alleged to have committed serious misconduct).
Ratio Decidendi: The Supreme Court ruled that while an employer may have a valid reason to dismiss an employee, the dismissal must still comply with due process. This case reaffirmed the principle of security of tenure, holding that workers must be afforded an opportunity to be heard and to contest the grounds for their dismissal. The Court further emphasized that even if the dismissal is for a just cause, the employer must observe the procedural requirements under the law (e.g., notice and hearing).


Article 280 – A worker is considered a regular employee if he has been employed for at least one year, whether continuously or broken, unless the nature of the work is seasonal or the employment is for a specific project.

 

Just Causes for Dismissal (Article 297):

  • Serious misconduct

  • willful disobedience

  • gross negligence

  • fraud, or

  • criminal offense in the course of employment

 

Article 297 (Formerly Article 283) – Just Causes for Dismissal:

This provision identifies the just causes under which an employer may terminate an employee’s services. Dismissal for just causes requires observance of due process, including the employee's right to a hearing.
San Miguel Corporation v. Pobre (G.R. No. 163187, June 29, 2011)
Facts: The case involved a dismissal based on gross neglect of duty by the employee. The employee failed to meet certain sales targets, which the employer deemed a form of neglect duty.
Ratio Decidendi: The Supreme Court ruled that the dismissal was valid because the employer proved that the employee was grossly negligent. However, it highlighted that even just causes must be proven with substantial evidence and that the employer must still follow due process. The Court emphasized the importance of giving the employee an opportunity to contest the dismissal.

 

Article 298 (Formerly Article 284) – Authorized Causes for Dismissal:
Authorized causes for dismissal relate to the legitimate reasons for termination of employment, such as business closure, redundancy, retrenchment, or installation of labor-saving devices. These causes require the employer to provide the employee with the appropriate notice and separation pay.
Philippine Long Distance Telephone Company (PLDT) v. NLRC (G.R. No. 101507, December 5, 1997)
Facts: PLDT retrenched several employees as part of a cost-cutting measure. The company argued that it had to reduce its workforce to prevent losses.
Ratio Decidendi: The Supreme Court upheld the retrenchment, acknowledging that PLDT was undergoing financial difficulties. However, it ruled that the employees were entitled to separation pay, as they were dismissed for an authorized cause. This case emphasized that when dismissing for authorized causes, employers must still adhere to procedural due process, including paying separation benefits.

 

Authorized causes include:

  • Installation of labor-saving devices

  • Redundancy

  • Retrenchment to prevent losses

  • Closure or cessation of operation

  • Employees dismissed under authorized causes are entitled to separation pay as prescribed by law.

 

Article 294 (Formerly Article 279) – Rights of Employees in Case of Dismissal:
This provision provides that regular employees who are dismissed without just cause are entitled to reinstatement and back wages, as well as the payment of damages in certain cases. The law provides strong protection against illegal dismissal, and workers who are unlawfully terminated can file a complaint with the National Labor Relations Commission (NLRC).

Gomez v. Philippine Airlines (G.R. No. 130101, April 18, 2001)
Facts: The case involved an employee of Philippine Airlines who was dismissed without due process. The airline argued that the employee's dismissal was based on serious misconduct.
Ratio Decidendi: The Court ruled that despite the airline's claim of just cause, the dismissal was illegal because the proper procedure for dismissal was not followed. The employee was entitled to reinstatement and back wages from the time of dismissal until the resolution of the case. The Court stressed the importance of both substantive and procedural due process in dismissals to uphold security of tenure.
 

Employees dismissed without just cause or without observing due process are entitled to:

  • Reinstatement (if possible)

  • Back wages

  • Separation pay (if reinstatement is not feasible)

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