FIRING MISSES (Terminating Employment the Philippine Way)

By Siesta-friendly

For business folk, Philippine labor laws can be too protective of labor. And it’s not as simple as Mr. Donald Trump saying “you’re fired!”  The prime example is the provisions on security of tenure -

“ART. 279. Security of tenure. - In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title.”

The Labor Code’s Implementing Rules specifically Rule I, Book VI add the relevant security of tenure provisions applicable to non-regular employees –

“Section 2. Security of tenure.

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b)      The foregoing [security of tenure provisions in cases of regular employment] shall also apply in cases of probationary employment: Provided, however, that in such cases, termination of employment due to failure of the employee to qualify in accordance with the standards of the employer made known to the former at the time of engagement may also be a ground for termination of employment.

c)      In cases of employment covered by contracting or subcontracting arrangements, no employee shall be dismissed prior to the expiration of the contract between the principal and contractor or subcontractor as defined in Rule VIII-A, Book III of these Rules, unless the dismissal is for just or authorized cause, or is brought about by the completion of the phase of the contract for which the employee was engaged but, in any case, subject to the requirements of due process or prior notice.”

Just and Authorized Causes for Termination

So, in general, just or authorized causes naturally negate security of tenure. What are these just or authorized causes?

The just causes for terminating an employee are found in Article 282 of the Labor Code:

“ART. 282. Termination by employer. - An employer may terminate an employment for any of the following causes:

(a)    Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

(b)    Gross and habitual neglect by the employee of his duties;

(c)    Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

(d)   Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and

(e)    Other causes analogous to the foregoing.”

The authorized causes are in the succeeding articles: 283 (Closure of establishment and reduction of personnel) and 284 (Disease as ground for termination).  They are as follows:

1)      installation of labor-saving devices

2)      redundancy

3)      retrenchment to prevent losses

4)      the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, or

5)      when the employee has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees.

And if you fire your employee without any legal cause?

“An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.” (ART. 279.).

Backwages, mind you, can run indefinitely as long as the case is pending thereby resulting in a windfall for the employee.  Unless, of course, you’re PAL or you have PAL’s lawyer and a mere letter to the Supreme Court can change everything.

Anyway, here’s what the Supreme Court has had to expound on the matter -

“… an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.  The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted.  In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

           

The normal consequences of [the employee’s] illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement.  Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative.  The payment of separation pay is in addition to payment of backwages.” (Mt. Carmel College vs. Resuena, et al. G.R. No. 173076, October 10, 2007)

Due Process: 2 Written Notices + 1 Hearing rule

Finding just or authorized causes is not enough.  The laws are strict on due process and have imposed the following requirements –

“For termination of employment based on just cases as defined in Article 282 of the Labor Code:

(i)     A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.

(ii)   A hearing or conference during which the employee concerned, with the assistance of counsel, if he so desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.

(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before effectivity of the termination, specifying the ground or grounds for termination.

If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination.” (Section 2, Rule I, Book VI, Implementing Rules of the Labor Code)

Check out how the Supreme Court strictly applied the due process rule despite the existence of sufficient cause for termination -

“.. respondent [employee] was not issued a written notice charging him of committing an infraction. The law is clear on the matter. A verbal appraisal of the charges against an employee does not comply with the first notice requirement. In Pepsi Cola Bottling Co. v. NLRC, the Court held that consultations or conferences are not a substitute for the actual observance of notice and hearing. Also, in Loadstar Shipping Co., Inc. v. Mesano, the Court, sanctioning the employer for disregarding the due process requirements, held that the employee’s written explanation did not excuse the fact that there was a complete absence of the first notice.

Second, even assuming that [employer] petitioner KKTI was able to furnish respondent an Irregularity Report notifying him of his offense, such would not comply with the requirements of the law. We observe from the irregularity reports against respondent for his other offenses that such contained merely a general description of the charges against him. The reports did not even state a company rule or policy that the employee had allegedly violated. Likewise, there is no mention of any of the grounds for termination of employment under Art. 282 of the Labor Code. Thus, KKTI’s "standard" charge sheet is not sufficient notice to the employee.

Third, no hearing was conducted. Regardless of respondent’s written explanation, a hearing was still necessary in order for him to clarify and present evidence in support of his defense. Moreover, respondent made the letter merely to explain the circumstances relating to the irregularity in his October 28, 2001 Conductor’s Trip Report. He was unaware that a dismissal proceeding was already being effected. Thus, he was surprised to receive the November 26, 2001 termination letter indicating as grounds, not only his October 28, 2001 infraction, but also his previous infractions.

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WHEREFORE, the petition is PARTLY GRANTED and the September 16, 2004 Decision of the CA is MODIFIED by deleting the award of backwages and 13th-month pay. Instead, petitioner KKTI is ordered to indemnify respondent the amount of thirty thousand pesos (PhP 30,000) as nominal damages for failure to comply with the due process requirements in terminating the employment of respondent.” (King Of Kings Transport, et al. vs, Tinga, et al., G.R. No. 166208, June 29, 2007).  

So employers, be very careful how you hire and fire your people. Even with a just or authorized cause for termination and the termination is declared legal, you may still end up being penalized for not following the required manner by which the firing should have been done.  There may be no award of backwages, reinstatement or separation pay but you may still be ordered to pay nominal damages as in the case above.

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WEIGHT AND SEE (Obesity as Ground for Termination)

By Obiter07

In a recent ruling, the Supreme Court upheld the dismissal of a flight steward on the ground of obesity. YRASUEGUI vs PHILIPPINE AIRLINES, INC. ( G.R. No. 168081 October 17, 2008) an international flight steward was dismissed for “his failure to adhere to the weight standards of the airline company.” It sounds discriminatory but the Court found that it was not.

On various dates, Petitioner was at 209 pounds, 217 pounds and 212 pounds, well beyond “the ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration Manual of PAL.” When found to be overweight, he was asked to go on leave in order to address this. He was unable to comply and in one instance, he even gained weight instead by 49 pounds beyond the limit. He was restricted to ground duty as a result. He made a written commitment to reduce his weight.

He remained overweight despite periods given to him in order to comply. He failed to report for weight checks and was “formally warned that a repeated refusal to report for weight check would be dealt with accordingly.”

In 1992, he was finally served a “Notice of Administrative Charge for violation of company standards on weight requirements” and given 10 days to answer. In his answer, he did not deny being overweight. He claimed that his violation had been condoned by PAL and that PAL had discriminated against him considering that there were “cabin crew members who are similarly situated.”

In 1993, “petitioner was formally informed by PAL that due to his inability to attain his ideal weight, “and considering the utmost leniency” extended to him “which spanned a period covering a total of almost five (5) years,” his services were considered terminated “effective immediately.” He filed a complaint for illegal dismissal against PAL. The Labor Arbiter ruled in his favor but this was overturned by the Court of Appeals. Hence, his recourse to the Supreme Court.

He argued that “(1) his dismissal does not fall under 282(e) of the Labor Code; (2) continuing adherence to the weight standards of the company is not a bona fide occupational qualification; and (3) he was discriminated against because other overweight employees were promoted instead of being disciplined.”

The Court found that obesity of petitioner is a ground for dismissal under Article 282(e) of the Labor Code. It found that the weight standards of PAL “constitute a continuing qualification of an employee in order to keep the job.” And “an employee may be dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight standards.” Hence a dismissal of the employee falls under Article 282(e) [1] of the Labor Code. It did not give credence to Petitioner’s claim that obesity is a “physical abnormality and/or illness,” citing Nadura v. Benguet Consolidated, Inc. The Supreme Court did not find the case applicable as it was not decided under the Labor Code. Moreover, there was no issue of flight safety in the aforecited case. In Nadura the dismissal was due to illness in contrast to the instant case where petitioner was dismissed for his failure to meet the weight standards of his employer. Another issue in Nadura is whether or not the dismissed employee is entitled to separation pay and damages. Here, the issue is the propriety of the dismissal. Fifth, in Nadura, the employee was not accorded due process. Here, petitioner was accorded “utmost leniency”, having been given more than four (4) years to comply with the weight standards.

The Court found that the evidence “on record militates against petitioner’s claims that obesity is a disease.” He was able to reduce weight given the “proper attitude, determination, and self-discipline.” He even admitted during a hearing that he could bring down his weight. The Court opined that “his fluctuating weight indicates absence of willpower rather than an illness.”

The Court also did not give weight (no pun intended) to petitioner’s citation of Bonnie Cook v. State of Rhode Island, Department of Mental Health, Retardation and Hospitals, decided by the United States Court of Appeals (First Circuit). In that case, it was held that morbid obesity is a disability under the Act cited therein and that respondent discriminated against her “based on “perceived” disability.” Evidence was introduced to show morbid obesity is a physiological disorder.

The Supreme Court found that petitioner is not morbidly obese. In the Cook case, the plaintiff was 100 pounds overweight. Petitioner was only less than 50 pounds over his ideal weight at his heaviest. One is tempted to thus ask if the Court would have decided in his favor if he had weighed more.

The Court held that the obesity of petitioner, in the context of his work as flight attendant, “becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service.” His obesity may not be intentional but it is “voluntary.” This element runs through all just causes under Article 282.

Petitioner likewise argued that there should be a statute constituting a “bona fide occupational qualification” (“BFOQ”) where an exception allows “an employer to engage in an otherwise unlawful form of prohibited discrimination if necessary to the normal operation of a business or enterprise.” Petitioner claims that since there was no such statute, there is no justification for his dismissal.

The court stated that there is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. The weight standards of PAL are reasonable. PAL being a common carrier “is bound to observe extraordinary diligence for the safety of the passengers it transports.” The weight standards of PAL show its effort to comply with these exacting obligations. PAL “has committed itself to safely transport its passengers. In order to achieve this, it must necessarily rely on its employees, most particularly the cabin flight deck crew who are on board the aircraft.”

Flight safety was given primary importance by the court, stating that: It cannot be gainsaid that cabin attendants must maintain agility at all times in order to inspire passenger confidence on their ability to care for the passengers when something goes wrong. It is not farfetched to say that airline companies, just like all common carriers, thrive due to public confidence on their safety records. People, especially the riding public, expect no less than that airline companies transport their passengers to their respective destinations safely and soundly.”

Cabin crew do not only serve meals or attend to passengers’ whims. Their “most important activity” is “to care for the safety of passengers and the evacuation of the aircraft when an emergency occurs. Passenger safety goes to the core of the job of a cabin attendant. Truly, airlines need cabin attendants who have the necessary strength to open emergency doors, the agility to attend to passengers in cramped working conditions, and the stamina to withstand grueling flight schedules.” And the “body weight and size of a cabin attendant are important factors to consider in case of emergency. Aircrafts have constricted cabin space, and narrow aisles and exit doors.” Airline companies cannot be compelled to reconfigure the aircraft just for overweight cabin attendants.

He was also found to be in estoppel since the weight standards were made known to him prior to his employment. He never questioned the authority of PAL when he was asked to trim down his weight. The Court even lapsed into Latin and Filipino: “Bona fides exigit ut quod convenit fiat. Good faith demands that what is agreed upon shall be done. Kung ang tao ay tapat kanyang tutuparin ang napagkasunduan.”

His allegation that he was discriminated against was not given credence. Except for pointing out the names of the supposed overweight cabin attendants, he “failed to indicate their respective ideal weights; weights over their ideal weights; the periods they were allowed to fly despite their being overweight; the particular flights assigned to them; the discriminating treatment they got from PAL; and other relevant data that could have adequately established a case of discriminatory treatment by PAL.”

Nevertheless the Court granted him separation pay even if normally, a legally dismissed employee is not entitled to separation pay. But it may be awarded as an act “social justice,” or based on “equity”, if the dismissal is not for serious misconduct and does not reflect on the moral character of the employee. He was thus given separation pay equivalent to one-half (1/2) month’s pay for every year of service.

It is with some irony that the scales of justice did not tip in favor of the petitioner here. However, this did involve a special case, where the nature of an employee’s duties with respect to flight safety was given emphasis by the Court. Not every job would be the same and mere obesity should not be a ground for dismissal. But health issues should be enough to compel an employee to lose weight not out of fear for his job but for fear for his life.

[1] Article 282 provides: “Termination by employer. — An employer may terminate an employment for any of the following just causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.

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