Dear Atty. Gab,

Musta Atty! I hope you can shed some light on my situation. I worked for a manufacturing company here in Laguna for many years, starting way back in the late 80s. Around 15 years ago, during a company downturn, I was laid off but received some separation pay. Thankfully, after about two years, they rehired me for a similar position, and I’ve been working there continuously since then.

About a year ago, I got into a heated argument with a supervisor which unfortunately turned physical. I maintain I was only defending myself. The company investigated, and I submitted my statement explaining my side. Nothing happened immediately, and I thought the issue was resolved, especially since the supervisor and I eventually settled things personally.

However, a few months later, I suffered a non-work-related injury that required me to be on sick leave for several months. While I was recovering, I received a letter from HR stating they were processing my “retirement due to medical reasons,” effective immediately. They mentioned my recent injury and some past health issues noted in my records. I was shocked because my doctor expected me to recover fully, and I never applied for retirement.

To make matters worse, the retirement pay they offered is only calculated from my rehiring date 13 years ago, completely ignoring my initial long service before the layoff. They said the layoff reset my tenure. I feel this is unfair, and I suspect the real reason they’re letting me go is the incident with the supervisor, not my health. Was my termination legal? And shouldn’t my entire service period count towards my separation or retirement pay? I’m really confused and worried. Any guidance would be greatly appreciated.

Salamat po,

Ricardo Cruz

Dear Ricardo Cruz,

Musta Atty! Thank you for reaching out and sharing your difficult situation. It’s completely understandable why you feel confused and unfairly treated, facing what seems like a forced retirement shortly after a workplace incident and dealing with disputes over your service computation after being rehired.

Your situation touches upon critical aspects of Philippine labor law, specifically the validity of termination grounds – whether it’s truly due to medical reasons or potentially disguised misconduct – and the correct computation of separation or retirement benefits, especially when there’s a break in service due to a previous layoff. An employer must have clear, valid grounds for termination and follow specific procedures. Ambiguity or switching reasons, like citing health after investigating misconduct, can render a dismissal illegal. Let’s delve into the specifics.

Untangling Service Tenure and Termination Grounds After Rehiring

In situations like yours, two main issues arise: the validity of your termination and the correct calculation of your final pay. Philippine labor law provides specific grounds for an employer to terminate employment, such as serious misconduct, or authorized causes like disease or retrenchment. However, the employer must be clear about the reason and follow due process.

Your company initially investigated the incident with your supervisor, which falls under potential serious misconduct. However, they later cited “retirement due to medical reasons.” This shift raises questions. As jurisprudence highlights, the basis for dismissal must be unambiguous.

“Dismissal is the ultimate penalty that can be meted to an employee. It must, therefore, be based on a clear and not on an ambiguous or ambivalent ground. Any ambiguity or ambivalence on the ground relied upon by an employer in terminating the services of an employee denies the latter his full right to contest its legality. Fairness cannot countenance such ambiguity or ambivalence.”

If the company intended to dismiss you for the altercation, they should have proceeded based on that ground, following the proper investigation and notice requirements. Shifting to a medical reason, especially if you were expected to recover, appears questionable. Furthermore, terminating an employee due to illness has strict requirements.

The law requires more than just a history of health issues or a recent injury. For a dismissal due to disease to be valid:

“[…] the employer shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. […] In the absence of such certification, Rueda’s retirement due to illness has no leg to stand on.” [Note: ‘Rueda’ refers to the employee in the source case, illustrating the principle].

Without this specific medical certification confirming your incapacity to work beyond six months, terminating you for medical reasons is likely invalid. If your dismissal lacks a clear, valid basis (either proven misconduct or certified illness), it could be considered illegal dismissal.

Regarding the computation of your separation or retirement pay, the key issue is whether your service should be counted continuously from your original hire date or only from your rehiring date. Generally, when an employee is legally retrenched (laid off) and receives separation pay, their employment tenure ends. Upon rehiring, a new employment period begins. Unless the initial retrenchment was illegal and challenged timely, or there’s a specific company policy or agreement stating otherwise, the service period is typically counted only from the date of rehiring.

If you accepted your separation pay during the layoff 15 years ago without contesting the retrenchment’s legality at that time, the period to challenge it has likely passed due to prescription. Legal precedent supports this:

“Even assuming, arguendo, that [the] retrenchment was unjustified, it is now too late to raise it as an issue on the ground of prescription. Rueda should have protested his retrenchment within four (4) years pursuant to Art. 1146 of the Civil Code.” [Again, ‘Rueda’ illustrates the point].

Therefore, unless you can prove the initial layoff was illegal and you contested it within the prescriptive period (generally four years for injury to rights), or if there’s a specific company policy or CBA provision stating previous service counts after rehiring, the company may be legally correct in calculating your benefits based only on your service from the rehiring date.

“As correctly ruled by the labor arbiter, Rueda’s length of service with petitioner should be reckoned from February 7, 1981, the date he was rehired…” [Illustrating the principle of calculating from the rehiring date when the prior separation wasn’t successfully challenged].

While this might seem unfair given your long initial service, the acceptance of separation pay and the passage of time often finalize the end of that earlier employment period for calculation purposes.

Practical Advice for Your Situation

• Gather Documentation: Collect all relevant documents: your original employment contract, layoff notice and separation pay receipt from 15 years ago, rehiring contract, documents related to the supervisor incident (your statement, any company memos), medical certificates regarding your injury and recovery prognosis, and the recent termination/retirement letter.
• Clarify Termination Ground: Formally request clarification from your HR department regarding the exact, official reason for your termination. Ask if they possess the required certification from a public health authority regarding your alleged medical incapacity.
• Review Company Policy/CBA: Check your employee handbook or any Collective Bargaining Agreement (CBA) if applicable. Look for specific policies regarding termination procedures, retirement eligibility, and how service tenure is calculated, especially after a break due to layoff and subsequent rehiring.
• Assess Medical Condition: Obtain a formal medical assessment from your doctor confirming your fitness to return to work or the expected recovery period. This contradicts the basis for medical retirement if you are fit or expected to recover within 6 months.
• Calculate Potential Entitlements: Based on your service from the rehiring date, calculate the separation pay you might be entitled to under the law (usually one month pay or one-half month pay per year of service, depending on the valid ground, if any) or retirement pay based on company policy/CBA or the Retirement Pay Law (RA 7641). Compare this with what the company offered.
• Consult DOLE-SEnA: Consider seeking assistance through the Department of Labor and Employment’s Single Entry Approach (SEnA) program. It’s a mandatory conciliation-mediation process to potentially reach a settlement regarding illegal dismissal and money claims.
• Seek Legal Counsel: Given the complexities involving potential illegal dismissal and disputes over pay computation, consulting a labor lawyer is highly advisable to evaluate the strength of your case and discuss options, including filing a formal complaint with the NLRC.

Your situation involves important legal principles regarding the grounds for dismissal and the computation of service tenure after a break. While the company’s calculation based on your rehiring date might be legally defensible if the prior layoff wasn’t contested, the validity of your recent termination itself seems questionable, especially if based on ambiguous grounds or unsubstantiated medical reasons. These principles are well-established in Philippine jurisprudence.

I hope this analysis helps clarify your rights and potential next steps. Please feel free to reach out if you have further questions.

Sincerely,
Atty. Gabriel Ablola

For more specific legal assistance related to your situation, please contact me through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This correspondence is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please schedule a formal consultation.