ASG Law

Tag: Employer Obligations

  • Resignation vs. Illegal Dismissal: Employee Rights and Employer Obligations in the Philippines

    Understanding Resignation and Illegal Dismissal: Protecting Employee Rights

    G.R. No. 112678, March 29, 1996 (EDUARDO M. ESPEJO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND COOPERATIVE INSURANCE SYSTEM OF THE PHILIPPINES, RESPONDENTS.)

    Imagine an employee, feeling undervalued, tenders their resignation. Later, they regret it. Can they retract their resignation? What if the employer swiftly accepts it, seemingly eager to see them go? This scenario highlights the crucial distinction between a voluntary resignation and an illegal dismissal, a distinction often blurred but with significant legal consequences for both employee and employer.

    The case of Eduardo M. Espejo vs. National Labor Relations Commission (NLRC) delves into this very issue. It examines the circumstances surrounding an employee’s resignation, its subsequent withdrawal, and the employer’s actions, ultimately determining whether an illegal dismissal occurred. This case offers valuable insights into employee rights and employer obligations in termination scenarios.

    The Legal Framework: Resignation vs. Dismissal

    Philippine labor law distinguishes sharply between resignation and dismissal. Resignation is a voluntary act by the employee, signifying their intention to terminate the employment relationship. Dismissal, on the other hand, is an act by the employer to terminate the employment. The key difference lies in the intent and the acting party.

    Article 300 (formerly Article 285) of the Labor Code of the Philippines addresses termination of employment, but it doesn’t explicitly define resignation. Jurisprudence, however, has established its characteristics. The Supreme Court has often reiterated that resignation must be clear, unequivocal, and unconditional. It must be a conscious and deliberate decision.

    Conversely, Article 294 (formerly Article 279) of the Labor Code protects employees from illegal dismissal, stating that “no worker shall be dismissed except for a just or authorized cause and only after due process.” Just causes are related to the employee’s conduct or performance, while authorized causes relate to the employer’s business needs. Due process requires notice and opportunity to be heard.

    For example, if an employee consistently violates company policies despite warnings, this could be considered a just cause for dismissal. On the other hand, if a company is facing financial difficulties and needs to reduce its workforce, this could be an authorized cause, provided proper procedures are followed.

    Case Narrative: Espejo vs. CISP

    Eduardo Espejo was the General Manager of the Cooperative Insurance System of the Philippines (CISP). Due to financial issues within CISP, the Board of Directors decided to sell company assets, including the car assigned to Espejo. Espejo disagreed and tendered his resignation, stating, “I regret to tender my resignation as General Manager of CISP effective October 11, 1989.”

    However, Espejo later had a change of heart and verbally withdrew his resignation before the effective date. Despite this, CISP proceeded to accept his resignation. Espejo then filed a case for illegal dismissal.

    The case proceeded through the following stages:

    • Labor Arbiter: Ruled in favor of Espejo, finding illegal dismissal and ordering reinstatement with backwages.
    • NLRC: Affirmed the illegal dismissal but modified the decision, denying reinstatement due to Espejo’s age and limiting backwages.
    • Supreme Court: Reviewed the NLRC decision.

    The Supreme Court, in its decision, highlighted the following key points:

    • Withdrawal of Resignation: The Court acknowledged Espejo’s attempt to withdraw his resignation before its effective date.
    • Acceptance of Resignation: The Court focused on whether CISP acted in bad faith by accepting the resignation despite the withdrawal.
    • Reinstatement: The Court agreed with the NLRC’s decision to deny reinstatement due to Espejo’s age, aligning with the principle that an employee can be retired at 60 in the absence of a retirement plan.

    The Supreme Court stated, “Apparently, CISP relied on the term ‘irrevocable’ in accepting the resignation of petitioner and did not take into account the latter’s change of heart. This misapprehension, absent any strong and convincing evidence to the contrary, cannot be deemed as bad faith on the part of CISP.”

    Ultimately, the Court ruled that while the dismissal was technically illegal, reinstatement was not feasible. Espejo was entitled to backwages, but only up to the date he reached the age of 60.

    Practical Implications: Employee Rights and Employer Responsibilities

    This case underscores the importance of clear communication and good faith in employment termination. Employers should carefully consider an employee’s attempt to withdraw a resignation, especially if done before the effective date. While reliance on the term “irrevocable” might seem justified, a prudent employer should investigate the circumstances surrounding the withdrawal.

    For employees, this case highlights the importance of clearly communicating their intentions. If considering resignation, it’s crucial to understand the implications and ensure the decision is final before submitting a formal resignation letter. If a change of heart occurs, immediate and unequivocal communication to the employer is essential.

    Key Lessons:

    • Clarity is Key: Both resignation and acceptance should be clear and unambiguous.
    • Good Faith: Employers should act in good faith when considering an employee’s attempt to withdraw a resignation.
    • Age Matters: Reinstatement may not be feasible if the employee has reached retirement age.
    • Backwages: Illegally dismissed employees are entitled to backwages, but the period may be limited by factors such as retirement age.

    For example, imagine an employee submits a resignation letter due to a temporary frustration. The next day, they realize their mistake and immediately inform their employer they wish to withdraw the resignation. A reasonable employer should consider this withdrawal, especially if the employee is valuable and the resignation hasn’t yet taken effect. Refusing to do so could lead to legal complications.

    Frequently Asked Questions (FAQs)

    Q: What is the difference between resignation and illegal dismissal?

    A: Resignation is a voluntary act by the employee to end their employment. Illegal dismissal is termination by the employer without just or authorized cause and without due process.

    Q: Can an employee withdraw their resignation?

    A: Yes, generally, an employee can withdraw their resignation before its effective date, provided the employer hasn’t already acted on it in good faith to their detriment.

    Q: What happens if an employer refuses to accept a resignation withdrawal?

    A: If the refusal is deemed to be in bad faith, it could be considered an illegal dismissal.

    Q: Is an illegally dismissed employee always entitled to reinstatement?

    A: Not always. Factors such as the employee’s age or the strained relationship between the parties may make reinstatement impractical. Separation pay may be awarded instead.

    Q: What are backwages?

    A: Backwages are the wages an employee would have earned had they not been illegally dismissed. They are typically awarded from the time of dismissal until the finality of the decision, subject to certain limitations.

    Q: What is the significance of good faith in resignation cases?

    A: Good faith is crucial. Employers should act reasonably and fairly when considering an employee’s attempt to withdraw a resignation. Employees should also act in good faith when submitting and potentially withdrawing their resignation.

    Q: What should an employer do if an employee attempts to withdraw their resignation?

    A: The employer should investigate the reasons for the withdrawal, consider the employee’s value to the company, and act reasonably in light of all the circumstances.

    ASG Law specializes in labor law and employment disputes. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Retrenchment vs. Redundancy: Navigating Employee Layoffs in the Philippines

    Distinguishing Retrenchment from Redundancy: A Guide for Philippine Employers

    AG&P UNITED RANK AND FILE ASSOCIATION (AG&P URFA) REYNALDO V. REYES, MARCELINO ADLIT, QUINTIN ONG III, TEOFILO C. RAMOS, FELIMON R. VALIENTE, MA. MAGDALENA MAGALONG, TORIBIO B. DE LEON, SEVERO C. BALBASTRO, JULIO F. MONTANO, CONRADO D. MANGARAN, JESUS M. CANONIGO, SARAH S. DELA PENA, ANITA A. CAINTIC, ASUNCION L. CORDERO, JAIME B. SANDOVAL, OSCAR O. GOMEZ, BONIFACIO A. ESPIRITU, JESUS E. AMARANTE, RICARDO M. LANDAYAN, FAUSTINO C. SAN ESTEBAN, FRANCISCO M. MANALO, ROLAND C. TUPALAR, IRENEO T. ANDAN, MARIA G. GUEVARRA, ERLINA B. SANCHEZ, SATURNINO C. QUINTO, DEOGENES F. SENORIN, OSCAR B. PALATTAO, AUGUSTO A. RIUS, ANNIE J. NAPICOL, CECILIA D. FORNALIZA, ANANIAS S. CAHILIG, CONSTANCIO R. PELIAS, JUANITO A. PIMENTEL, ROLANDO L. HOLGADO, RAMON M. PERMICILLO, PETITIONERS, VS. NLRC (FIRST DIVISION) AND ATLANTIC GULF AND PACIFIC COMPANY OF MANILA, INC., RESPONDENTS. G.R. No. 108259, November 29, 1996

    Imagine a company struggling to stay afloat during an economic downturn. To survive, it needs to reduce its workforce. But what are the legal requirements for doing so? This case, AG&P United Rank and File Association vs. NLRC, clarifies the crucial differences between retrenchment and redundancy, two legally recognized grounds for employee layoffs in the Philippines. It emphasizes the importance of proving financial losses when implementing a retrenchment program.

    Understanding Retrenchment and Redundancy Under Philippine Law

    The Labor Code of the Philippines provides specific guidelines for terminating employees due to economic reasons. Two of the most common grounds are retrenchment and redundancy, often used interchangeably but with distinct legal meanings. Misunderstanding these differences can lead to costly legal battles for employers.

    Article 283 of the Labor Code (now Article 301 after renumbering) outlines the requirements for both. Retrenchment is defined as the termination of employment to prevent losses. Redundancy, on the other hand, exists when an employee’s services are in excess of what is reasonably demanded by the actual requirements of the enterprise. The key difference lies in the underlying reason for the termination.

    To illustrate, consider a hypothetical scenario: A construction company faces a significant decline in projects due to an economic recession. To avoid bankruptcy, the company decides to reduce its workforce. This is retrenchment. Now, imagine a bank that automates many of its customer service functions, making some teller positions obsolete. This is redundancy.

    In cases of retrenchment, the law requires employers to prove actual or reasonably imminent losses. As this case highlights, it is also crucial to comply with procedural requirements, including providing adequate notice and separation pay. The Labor Code states that “the employer may also terminate the employment of any employee due to…retrenchment to prevent losses…or close or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof.”

    AG&P Case: A Detailed Look

    This case arose from a labor dispute between AG&P United Rank and File Association (AG&P URFA) and Atlantic Gulf and Pacific Company of Manila, Inc. (AG&P). The union declared a strike during CBA negotiations, and shortly thereafter, the company implemented a “redundancy program” citing financial difficulties, leading to the layoff of numerous employees, including union members.

    The union filed a complaint for unfair labor practice and illegal dismissal, arguing that the company’s actions were a union-busting tactic. The Labor Arbiter initially dismissed the complaint, finding the redundancy program necessary. However, the NLRC’s Third Division reversed this decision, concluding that the company had not proven actual losses. The case eventually reached the NLRC’s First Division, which reconsidered the Third Division’s ruling and reinstated the Labor Arbiter’s decision, admitting additional evidence of the company’s financial losses.

    Here’s a breakdown of the case’s procedural journey:

    • Union declared a strike during CBA negotiations.
    • AG&P implemented a “redundancy program,” laying off employees.
    • Union filed a complaint for unfair labor practice and illegal dismissal.
    • Labor Arbiter dismissed the complaint.
    • NLRC Third Division reversed the Labor Arbiter’s decision.
    • NLRC First Division reconsidered, admitted new evidence, and reinstated the Labor Arbiter’s decision.

    The Supreme Court ultimately upheld the NLRC First Division’s decision, emphasizing the importance of admitting evidence of financial losses, even if belatedly presented, provided the delay is justified. The Court stated, “It is now settled that the NLRC has the power to admit on appeal additional evidence to show lawful cause for dismissal, provided that the delay in the submission of said evidence is explained and the same clearly proves the employer’s allegation of a valid cause for dismissing his employees.”

    The Court also addressed the validity of the quitclaims signed by the employees. The Court held that not all quitclaims are invalid. “If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind.”

    Practical Implications for Employers and Employees

    This case provides crucial guidance for employers contemplating employee layoffs. It underscores the necessity of maintaining meticulous financial records and being prepared to present evidence of actual or imminent losses to justify retrenchment. It also highlights that the acceptance of separation pay and the signing of quitclaims, if done voluntarily and with full understanding, can bar employees from later questioning their dismissal.

    For employees, the case emphasizes the importance of understanding their rights and carefully reviewing any documents they are asked to sign during a layoff. While quitclaims are not automatically invalid, they must be entered into voluntarily and with a full understanding of their implications.

    Key Lessons:

    • Employers must be prepared to prove financial losses to justify retrenchment.
    • Delays in submitting evidence can be excused if justified.
    • Voluntary quitclaims with reasonable consideration are generally valid.

    Frequently Asked Questions (FAQs)

    Q: What is the main difference between retrenchment and redundancy?

    A: Retrenchment is implemented to prevent losses, while redundancy occurs when an employee’s position is no longer needed due to changes in the business.

    Q: What evidence do employers need to present to justify retrenchment?

    A: Employers must provide financial statements, audit reports, and other documents demonstrating actual or imminent losses.

    Q: Are quitclaims always valid?

    A: No. Quitclaims are valid only if entered into voluntarily, with full understanding, and for reasonable consideration.

    Q: What should employees do if they are offered a quitclaim?

    A: Employees should carefully review the terms of the quitclaim and seek legal advice before signing.

    Q: Can an employee challenge a retrenchment if they signed a quitclaim?

    A: It depends. If the quitclaim was entered into voluntarily and with full understanding, it may be difficult to challenge the retrenchment. However, if there was fraud, duress, or unconscionable terms, the quitclaim may be invalidated.

    Q: What are the notice requirements for retrenchment?

    A: The employer must serve a written notice on the employees and the Department of Labor and Employment at least one month before the intended date of termination.

    Q: What separation pay are employees entitled to in case of retrenchment?

    A: Employees are entitled to separation pay equivalent to one month’s pay or at least one-half (1/2) month’s pay for every year of service, whichever is higher.

    ASG Law specializes in labor law and employment disputes. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Understanding Employee Dismissal: Seaman’s Rights and Employer Obligations in the Philippines

    When Can a Seaman Be Dismissed? Balancing Employer Authority and Employee Rights

    G.R. No. 105396, November 19, 1996

    Imagine a seaman, dedicated to his work for years, suddenly dismissed for alleged insubordination. This scenario highlights the complex balance between an employer’s right to manage their workforce and an employee’s right to due process and job security. The case of Stolt-Nielsen Marine Services (Phils.), Inc. vs. National Labor Relations Commission delves into this very issue, examining the grounds for legal dismissal and the importance of following proper procedures.

    This case explores whether a seaman’s dismissal was justified due to alleged disobedience, and whether the employer followed proper procedures. It also questions the validity of overtime pay claims and the jurisdiction of labor tribunals. Understanding these aspects is crucial for both employers and employees in the maritime industry.

    Legal Framework for Employee Dismissal in the Philippines

    Philippine labor law protects employees from arbitrary dismissal. Article 294 (formerly Article 279) of the Labor Code states that no employee can be terminated except for a just cause or authorized cause, and only after due process. Just causes typically relate to the employee’s conduct or performance, while authorized causes are based on economic or business reasons.

    Due process requires that the employee be given notice of the charges against them and an opportunity to be heard. The Supreme Court has consistently emphasized the importance of these twin requirements. As the Court stated in a similar case, “An employee cannot just be separated from his employment without according him his constitutional right of due process, consisting of the proper notice and hearing.”

    In cases of alleged insubordination, the employer must prove that the employee’s disobedience was willful and that the order violated was reasonable, lawful, and related to the employee’s duties. For example, if a factory worker consistently refuses to wear safety gear despite repeated warnings, that could be considered willful disobedience. However, if an employer asks a secretary to perform construction work, refusal to do so would not be insubordination because it falls outside the scope of their job description.

    The Story of Eduardo Monsale: From Dedicated Seaman to Dismissed Employee

    Eduardo Monsale, a seaman with ten years of dedicated service to Stolt-Nielsen, faced an unexpected turn of events. After signing a contract to work as an engine fitter, he was immediately assigned to deck duties by the ship’s captain. Later, he was ordered to clean a cargo tank with a toxic chemical without protective gear. When he fell ill and couldn’t report for work, he was accused of disobedience and subsequently dismissed.

    Monsale filed a complaint with the Philippine Overseas Employment Administration (POEA), alleging illegal dismissal and contract substitution. The POEA ruled in his favor, ordering Stolt-Nielsen to pay his unpaid salaries and other benefits. Stolt-Nielsen appealed to the National Labor Relations Commission (NLRC), which affirmed the POEA’s decision.

    The case then reached the Supreme Court. The key issues were:

    • Whether Monsale was illegally dismissed.
    • Whether the NLRC committed grave abuse of discretion in awarding fixed overtime pay.
    • Whether the case should have been referred to a grievance committee.

    The Supreme Court scrutinized the evidence presented, particularly the ship’s logbook entries, which the company claimed supported their allegations of insubordination. However, the Court noted that only abstracts of the logbook were presented, not the original or photocopies of the relevant pages. This raised doubts about the veracity of the claims.

    The Court quoted, “The log book is a respectable record that can be relied upon to authenticate the charges filed and the procedure taken against the employees prior to their dismissal…Curiously, however, no entry from such log book was presented at all in this case.”

    The Court emphasized the importance of due process, stating that the employer must provide the employee with two written notices before termination: one informing them of the charges and another informing them of the decision to dismiss. The Court found that Stolt-Nielsen failed to comply with this requirement.

    Practical Implications for Employers and Employees

    This case reinforces the importance of following due process in employee dismissal cases. Employers must ensure that they have a just cause for dismissal and that they provide the employee with proper notice and an opportunity to be heard. Failure to do so can result in costly legal battles and damage to the company’s reputation.

    For employees, this case highlights the importance of knowing their rights and seeking legal advice if they believe they have been unfairly dismissed. Seamen, in particular, should be aware of the terms of their employment contracts and the procedures for resolving disputes.

    Key Lessons:

    • Employers must have a just cause for dismissing an employee.
    • Due process requires proper notice and an opportunity to be heard.
    • Logbook entries must be properly presented as evidence.
    • Employees should be aware of their rights and seek legal advice if necessary.

    Frequently Asked Questions (FAQs)

    Q: What constitutes a just cause for dismissal?

    A: Just causes typically relate to the employee’s conduct or performance, such as serious misconduct, willful disobedience, gross negligence, fraud, or commission of a crime.

    Q: What is due process in employee dismissal?

    A: Due process requires that the employee be given notice of the charges against them and an opportunity to be heard. This typically involves a written notice and a hearing where the employee can present their side of the story.

    Q: What evidence is required to prove insubordination?

    A: The employer must prove that the employee’s disobedience was willful and that the order violated was reasonable, lawful, and related to the employee’s duties. Logbook entries, witness testimonies, and other relevant documents can be used as evidence.

    Q: What are the remedies for illegal dismissal?

    A: An employee who has been illegally dismissed may be entitled to reinstatement, back wages, and other damages.

    Q: How does a Collective Bargaining Agreement (CBA) affect dismissal procedures?

    A: A CBA may contain provisions that supplement or modify the standard dismissal procedures under the Labor Code. Employers must comply with the terms of the CBA in addition to the requirements of the law.

    Q: What is the role of the POEA in overseas employment disputes?

    A: The POEA has jurisdiction over disputes arising from overseas employment contracts. It can hear and resolve complaints filed by overseas Filipino workers (OFWs) against their employers.

    Q: Are seamen entitled to overtime pay?

    A: Seamen are entitled to overtime pay for hours worked in excess of the regular working hours. However, they are not entitled to overtime pay simply because they are on board the vessel beyond the regular working hours.

    ASG Law specializes in labor law, representing both employers and employees in disputes. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Wage Distortion in the Philippines: Understanding Employee Rights and Employer Obligations

    Navigating Wage Distortion: Ensuring Fair Compensation in the Philippines

    G.R. No. 108556, November 19, 1996, Manila Mandarin Employees Union vs. National Labor Relations Commission

    Imagine a scenario where long-term employees find their salaries nearly equal to those of newly hired staff due to legislated minimum wage increases. This situation, known as wage distortion, can lead to dissatisfaction and disputes. The Supreme Court case of Manila Mandarin Employees Union vs. National Labor Relations Commission provides crucial insights into how Philippine labor laws address and resolve such issues.

    This case examines the complexities of wage distortion claims, the importance of proving the existence of such distortions, and the proper procedures for resolving them. It highlights the need for clear evidence and adherence to established grievance mechanisms.

    Understanding Wage Distortion Under Philippine Law

    Wage distortion arises when mandated wage increases compress or eliminate the intended pay differences between employee groups based on skills, seniority, or other logical factors. This can occur when across-the-board increases primarily benefit those at the lower end of the pay scale, narrowing the gap with more experienced or skilled employees.

    Prior to Republic Act No. 6727, the concept of wage distortion was not explicitly defined in the Labor Code. However, R.A. 6727 amended Article 124 of the Labor Code to provide a clear definition:

    “…a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.”

    The law mandates a specific process for addressing wage distortion. Firstly, employers and unions must negotiate to correct the distortion. If no resolution is reached, the dispute should be resolved through the grievance procedure outlined in their collective bargaining agreement (CBA) or through voluntary arbitration. In the absence of a CBA or recognized labor union, employers must consult with their workers to rectify the distortion. If this fails, the National Conciliation and Mediation Board (NCMB) steps in, and unresolved cases may then be elevated to the National Labor Relations Commission (NLRC).

    For example, if a company increases the minimum wage to comply with a new law, and as a result, a junior accountant earns almost the same as a senior accountant with years of experience, a wage distortion exists. The company and its employees must then negotiate to adjust the senior accountant’s salary to reflect their experience and skills.

    The Manila Mandarin Case: A Detailed Breakdown

    The Manila Mandarin Employees Union filed a complaint on behalf of its members, alleging that wage distortions had occurred due to various Presidential Decrees and Wage Orders mandating minimum wage increases. The Union argued that the hotel failed to implement corresponding increases in the basic salary rates of newly hired employees, exacerbating the issue.

    The Labor Arbiter initially ruled in favor of the Union, awarding a significant sum for salary adjustments and underpayments. However, the National Labor Relations Commission (NLRC) reversed this decision, finding a lack of merit in the Union’s claims.

    Key procedural steps in the case included:

    • Filing of the complaint by the Union with the NLRC Arbitration Branch.
    • Submission of position papers and amended complaints by both parties.
    • The Labor Arbiter’s decision favoring the Union.
    • The Hotel’s appeal to the NLRC.
    • The NLRC’s reversal of the Labor Arbiter’s decision.
    • The Union’s appeal to the Supreme Court.

    The Supreme Court, in its decision, upheld the NLRC’s ruling, stating that the Union failed to provide sufficient evidence to prove the existence of wage distortions. The Court emphasized that the burden of proof lies with the party alleging the distortion.

    “It was, to be sure, incumbent on the UNION to prove by substantial evidence its assertion of the existence of a wage distortion. This it failed to do. It presented no such evidence to establish, as required by the law, what, if any, were the designed quantitative differences in wage or salary rates between employee groups, and if there were any severe contractions or elimination of these quantitative differences.”

    The Court also noted that a previous Compromise Agreement between the parties had already addressed wage-related issues up to a certain point. Furthermore, the Court found that the disparity in salaries among employees in similar positions was primarily due to differences in hiring dates and initial positions, rather than wage distortion.

    The Court stated that the clear mandate of the wage orders was to increase the prevailing minimum wages of particular employee groups and not to grant across-the-board increases to all employees.

    “It indeed appears that the clear mandate of those issuances was merely to increase the prevailing minimum wages of particular employee groups. There were no across-the-board increases to all employees; increases were required only as regards those specified therein.”

    Practical Implications for Employers and Employees

    This case underscores several crucial points for both employers and employees. Employers must ensure compliance with minimum wage laws and implement wage adjustments correctly. Employees must understand their rights and responsibilities in claiming wage distortions and must gather sufficient evidence to support their claims.

    Consider a scenario where a company implements a new minimum wage. To avoid wage distortion claims, the company should review the salaries of all employees and adjust those of senior employees to maintain a reasonable differential based on experience, skills, and responsibilities. A spreadsheet outlining employee roles, experience, and corresponding salaries would be helpful to show the logic in place.

    Key Lessons:

    • Burden of Proof: The party claiming wage distortion must provide substantial evidence to support their claim.
    • Negotiation First: Employers and unions must first attempt to resolve wage distortion issues through negotiation and grievance procedures.
    • Clear Documentation: Maintain clear records of employee salaries, hiring dates, and positions to justify pay differentials.
    • Compromise Agreements: Honor any existing compromise agreements related to wage issues.

    Frequently Asked Questions (FAQ)

    Q: What is wage distortion?

    A: Wage distortion occurs when legally mandated wage increases significantly reduce or eliminate the intended pay differences between employee groups based on skills, seniority, or other legitimate factors.

    Q: What laws govern wage distortion in the Philippines?

    A: The primary law is Article 124 of the Labor Code, as amended by Republic Act No. 6727 (Wage Rationalization Act).

    Q: What should an employee do if they believe they are experiencing wage distortion?

    A: The employee should first discuss the issue with their employer or union representative. If no resolution is reached, they may file a complaint with the NLRC.

    Q: What evidence is needed to prove wage distortion?

    A: Evidence may include salary records, job descriptions, and other documents that demonstrate the intended pay differences between employee groups and how these differences have been eroded by wage increases.

    Q: Can a company be penalized for wage distortion?

    A: If a company fails to address wage distortion after it has been proven, they may be ordered to make salary adjustments and may face other penalties.

    Q: Does a compromise agreement prevent future wage distortion claims?

    A: A valid compromise agreement can prevent future claims if it explicitly covers the issues in dispute and is entered into voluntarily by the parties.

    Q: What is the role of the NLRC in wage distortion cases?

    A: The NLRC acts as the final arbiter in wage distortion disputes that cannot be resolved through negotiation or conciliation.

    ASG Law specializes in Labor Law. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • When Can Philippine Employers Deny Financial Assistance After Termination?

    Financial Assistance After Termination: When is it Not Allowed?

    G.R. No. 109033, August 22, 1996

    Imagine losing your job after decades of service. It’s a harsh reality, but what if, on top of that, the financial assistance you expected is denied? This is the core issue in China Banking Corporation vs. National Labor Relations Commission and Victorino C. Cruz. The Supreme Court clarified that financial assistance isn’t always a given, especially when serious misconduct is involved.

    Understanding Termination and Financial Assistance in the Philippines

    In the Philippines, employers can terminate employees for just causes, as outlined in Article 282 of the Labor Code. These causes include serious misconduct, willful disobedience, gross neglect of duty, fraud, or commission of a crime against the employer or its representatives. However, even when a dismissal is justified, labor laws and jurisprudence sometimes allow for financial assistance to be granted, considering factors like length of service and the circumstances of the termination.

    Article 282 of the Labor Code states:

    ‘Art 282. 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.’

    The concept of financial assistance aims to provide some support to a terminated employee, especially after long years of service. However, this isn’t an automatic entitlement. The Supreme Court has emphasized that social justice shouldn’t shield wrongdoers from the consequences of their actions.

    For example, if an employee is dismissed for stealing company funds, they are unlikely to receive financial assistance. Conversely, an employee dismissed for a less severe offense, after many years of loyal service, might be eligible.

    The China Banking Corporation Case: A Detailed Breakdown

    Victorino C. Cruz, an employee of China Banking Corporation, was dismissed for serious misconduct. The Labor Arbiter initially dismissed Cruz’s complaint for illegal suspension, illegal dismissal, and unfair labor practice, but awarded him P20,000 as financial assistance. The National Labor Relations Commission (NLRC) affirmed this decision, citing a previous case, Philippine Long Distance Telephone Company vs. National Labor Relations Commission, as justification for the financial assistance.

    China Banking Corporation then elevated the case to the Supreme Court, questioning the NLRC’s decision to award financial assistance despite finding that Cruz’s dismissal was for cause.

    Here’s a breakdown of the case’s journey:

    • Labor Arbiter: Dismissed the illegal dismissal complaint but awarded financial assistance.
    • NLRC: Affirmed the Labor Arbiter’s decision.
    • Supreme Court: Reviewed the NLRC’s decision on the issue of financial assistance.

    The Supreme Court ultimately sided with China Banking Corporation, stating that the grant of financial assistance was unjustified.

    The Solicitor General argued:

    “There is no doubt that private respondent is guilty of ‘serious misconduct or willful disobedience of lawful orders of his employer,’ although the NLRC has watered it down to ‘gross negligence.’”

    The Court emphasized that Cruz’s actions had caused significant financial damage to the bank, amounting to P1,717,508.64. This was due to his failure to follow a company rule regarding the crossing of manager’s checks.

    As the Court stated:

    “The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense… This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it…”

    Practical Implications for Employers and Employees

    This case sets a clear precedent: financial assistance is not an automatic right, especially when the dismissal is due to serious misconduct that causes significant harm to the employer. Employers should ensure that their company policies are clear and consistently enforced. Employees, on the other hand, must understand the importance of adhering to these policies to avoid potential disciplinary actions and loss of benefits.

    This ruling also serves as a reminder that length of service, while a factor in some labor disputes, does not excuse serious breaches of trust or violations of company policy. The Court emphasized that loyalty and adherence to company rules are paramount.

    Key Lessons:

    • Financial assistance is not guaranteed in cases of serious misconduct.
    • Employers must have clear and consistently enforced company policies.
    • Employees must adhere to company policies to avoid disciplinary action.
    • Social justice does not protect wrongdoers from the consequences of their actions.

    For example, a company discovers an employee has been falsifying expense reports for years, resulting in substantial financial losses. Based on the China Banking Corporation ruling, the company would be justified in denying financial assistance upon termination.

    Frequently Asked Questions

    Q: What constitutes “serious misconduct” in the context of employment termination?

    A: Serious misconduct generally involves intentional wrongdoing or a flagrant disregard for established rules and policies that causes significant harm to the employer.

    Q: Is length of service a guarantee for financial assistance upon termination?

    A: No, length of service is a factor, but it does not guarantee financial assistance, especially in cases of serious misconduct.

    Q: Can an employer deny financial assistance even if the employee has no prior disciplinary record?

    A: Yes, if the current offense constitutes serious misconduct that causes significant harm, a clean disciplinary record may not be sufficient to warrant financial assistance.

    Q: What should employers do to ensure their policies are enforceable?

    A: Employers should have clear, written policies that are consistently communicated and enforced. Regular training sessions and documented acknowledgments from employees are also crucial.

    Q: What recourse does an employee have if they believe they were unjustly denied financial assistance?

    A: The employee can file a complaint with the National Labor Relations Commission (NLRC) to contest the denial of financial assistance.

    Q: Does this ruling apply to all types of employment contracts?

    A: Yes, this ruling generally applies to all types of employment contracts covered by the Labor Code of the Philippines.

    ASG Law specializes in labor law and employment disputes. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Immediate Reinstatement Pending Appeal: Understanding Employee Rights in the Philippines

    Understanding the Immediate Reinstatement of Employees Pending Appeal

    Philippine Airlines Inc. vs. National Labor Relations Commission, G.R. No. 113827, July 05, 1996

    Imagine being unfairly dismissed from your job and facing an uncertain future. Philippine labor law offers a crucial safeguard: immediate reinstatement pending appeal. This ensures that employees aren’t left without income while their case is being resolved. This article delves into a landmark Supreme Court case, Philippine Airlines Inc. vs. National Labor Relations Commission, which clarifies the scope and application of this vital protection.

    The case revolves around the dismissal of employees of Philippine Airlines (PAL) who sought regularization. While the case was under appeal, the Labor Arbiter ordered their immediate reinstatement. PAL challenged this order, arguing that since the employer-employee relationship was contested, immediate reinstatement shouldn’t apply. The Supreme Court, however, upheld the immediate reinstatement order, reinforcing the importance of this provision in protecting workers’ rights.

    Legal Basis for Immediate Reinstatement

    The legal foundation for immediate reinstatement lies in Article 223 of the Labor Code, as amended by Republic Act No. 6715. This provision aims to balance the interests of both employers and employees during labor disputes. It ensures that dismissed employees are not left without recourse while their case is being appealed. It is designed to restore the status quo and ensure that the employee is not unduly prejudiced during the appeal process.

    Article 223 states:

    “ART. 223.     Appeal. — x x x

    In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.”

    This means that even if an employer appeals a Labor Arbiter’s decision ordering reinstatement, the employer must either allow the employee to return to work or, at their option, continue paying the employee’s salary while the appeal is pending. The employer cannot delay the reinstatement by posting a bond.

    For example, if a company dismisses an employee and the Labor Arbiter rules the dismissal was illegal and orders reinstatement, the company must comply immediately. They can choose to bring the employee back to work or simply keep them on the payroll. This ensures the employee continues to receive income while the appeal is ongoing.

    The PAL vs. NLRC Case: A Closer Look

    The Philippine Airlines Inc. vs. National Labor Relations Commission case began with a dispute over the regularization of employees. Here’s a breakdown of the key events:

    • Initial Complaint: Approximately 150 employees, recruited by Stellar Industrial Services, Inc. (SISI) to work for PAL, filed cases for regularization, illegal dismissal, reinstatement, back wages, and wage differentials.
    • Labor Arbiter’s Decision: Labor Arbiter de Vera declared the complainants to be regular employees of PAL and ordered PAL to pay them over 46 million pesos. Labor Arbiter Reyes decided the illegal dismissal case in favor of the complainants, ordering PAL to absorb them into its regular workforce and pay them back wages and benefits.
    • Appeal and Writ of Execution: PAL appealed the decision to the NLRC. Pending resolution of the appeal, Labor Arbiter Reyes issued a writ of execution directing the reinstatement of the complainants.
    • PAL’s Petition for Injunction: PAL filed a petition for a writ of injunction with the NLRC to stop the execution of the reinstatement order.
    • NLRC’s Decision: The NLRC dismissed PAL’s petition, citing Article 223 of the Labor Code.

    The Supreme Court upheld the NLRC’s decision, emphasizing the intent of the law to restore the status quo in the workplace while the case is being resolved.

    The Court stated:

    “The intent of the law in making a reinstatement order immediately executory is much like a return-to-work order, i.e., to restore the status quo in the workplace in the meantime that the issues raised and the proofs presented by the contending parties have not yet been finally resolved.”

    The Court further clarified that even if the employer challenges the existence of an employer-employee relationship, the immediate reinstatement order still applies if there is evidence suggesting such a relationship existed. The Labor Arbiters had already declared that the complainants are employees of petitioner PAL.

    As the court noted:

    “PAL’s claim that Article 223 ‘is only applicable where (an) employer-employee relationship is supported by clear evidence or where it is admitted to be existent,’ is irrelevant inasmuch as the Labor Arbiters have declared that the complainants are employees of petitioner PAL.”

    Practical Implications for Employers and Employees

    This ruling has significant implications for both employers and employees in the Philippines. For employers, it means they must comply with reinstatement orders even while appealing a case. They have the option of either physically reinstating the employee or simply keeping them on the payroll.

    For employees, this decision provides a crucial safety net. It ensures they continue to receive income while their case is being appealed, preventing undue hardship. It also reinforces the importance of documenting their employment relationship and any potential illegal dismissals.

    Key Lessons

    • Immediate Reinstatement is Mandatory: Reinstatement orders are immediately executory, even pending appeal.
    • Employer’s Options: Employers can choose between physical reinstatement or payroll reinstatement.
    • Contested Employment: Even if the employer-employee relationship is contested, reinstatement may still be required.
    • Document Everything: Employees should maintain thorough records of their employment and any related disputes.

    Frequently Asked Questions

    Q: What does “reinstatement pending appeal” mean?

    A: It means that if a Labor Arbiter orders an employer to reinstate a dismissed employee, the employer must do so immediately, even if they plan to appeal the decision. The employer can either allow the employee to return to work or continue paying their salary.

    Q: Can an employer avoid reinstatement by posting a bond?

    A: No, the posting of a bond does not stay the execution of a reinstatement order.

    Q: What if the employer claims the employee was never really an employee?

    A: If the Labor Arbiter has already determined that an employer-employee relationship exists, the reinstatement order is still valid, even if the employer disputes it.

    Q: What are my options if my employer refuses to reinstate me?

    A: You can file a motion for execution of the reinstatement order with the Labor Arbiter. If the employer still refuses to comply, you can seek assistance from the NLRC or a labor lawyer.

    Q: Does this apply to all types of employees?

    A: Yes, this applies to all employees covered by the Labor Code, regardless of their position or status.

    Q: What evidence is needed to prove employer-employee relationship?

    A: Evidence may include employment contracts, payslips, company ID, SSS contributions, and testimonies from co-workers.

    ASG Law specializes in labor law and employment disputes. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Illegal Dismissal: Employee Rights and Employer Obligations in the Philippines

    Reinstatement After Illegal Dismissal: Understanding Employee Rights and Employer Responsibilities

    G.R. No. 115759, June 21, 1996

    Imagine losing your job unexpectedly, only to be told later it was done illegally. What happens next? This case clarifies the rights of employees in the Philippines who have been illegally dismissed, particularly concerning reinstatement and backwages. It highlights the crucial steps an employee must take to enforce their rights and the obligations of employers during the appeal process.

    Legal Context: Reinstatement and Backwages Under the Labor Code

    The Labor Code of the Philippines protects employees from unfair dismissal. Article 223 outlines the process for appealing labor arbiter decisions. A key provision states that an order of reinstatement is immediately executory, even pending appeal. This means the employee should be reinstated either physically or on payroll while the case is being reviewed.

    However, the law isn’t self-executing. The Supreme Court has clarified that a writ of execution is necessary to enforce the reinstatement order. This writ commands the employer to reinstate the employee, giving them the option of actual or payroll reinstatement. Failure to comply can result in contempt charges.

    Article 223 of the Labor Code:

    “In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall be immediately executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of the bond by the employer shall not stay the execution for reinstatement provided herein.”

    Case Breakdown: Purificacion F. Ram vs. National Labor Relations Commission and JRS Business Corporation

    Purificacion Ram was a counter-clerk trainee at JRS Business Corporation. After a few months, she was appointed as a probationary employee but was later terminated for allegedly failing to meet performance standards. JRS cited violations of company rules like tardiness and leaving her post without permission.

    Here’s a breakdown of the case’s journey through the legal system:

    • Labor Arbiter: Ruled in favor of Ram, declaring her dismissal illegal and ordering reinstatement with backwages and attorney’s fees.
    • NLRC (National Labor Relations Commission): Affirmed the reinstatement order but removed the award of backwages and attorney’s fees.
    • Supreme Court: Partially granted Ram’s petition, reinstating the award of backwages but denying her claim for payroll backwages during the appeal period.

    The Supreme Court emphasized that Ram’s failure to obtain a writ of execution was critical. As the Court stated:

    “Absent a writ of execution issued and served upon JRS, the latter was not formally and appropriately given the chance to choose between actual and payroll reinstatement. Hence, due to her own inaction we are constrained to deny petitioner’s prayer for payroll backwages.”

    The Court also addressed the issue of backwages, disagreeing with the NLRC’s decision to deny them based on minor infractions. The Court reasoned that the penalty was too harsh and that denying backwages from the time of dismissal until the Labor Arbiter’s decision was sufficient punishment.

    Regarding the attorney’s fees, the Supreme Court reinstated the Labor Arbiter’s award. The original complaint included a claim for salary differentials, and the Labor Arbiter had based the attorney’s fees on Article 2208(7) of the Civil Code, which allows for recovery of attorney’s fees in actions for the recovery of wages.

    Practical Implications: What This Means for Employers and Employees

    This case underscores the importance of understanding the procedural requirements for enforcing labor rights. While reinstatement orders are immediately executory, employees must actively pursue a writ of execution to compel employers to comply. Employers, on the other hand, must be aware of their options for reinstatement (actual or payroll) and the potential consequences of non-compliance.

    For employees, this case serves as a reminder to take proactive steps to protect their rights. For employers, it emphasizes the need to follow due process in termination cases and to understand their obligations regarding reinstatement orders.

    Key Lessons:

    • Employees: If you win a reinstatement order, immediately file a motion for a writ of execution to enforce it.
    • Employers: Understand your options for reinstatement (actual or payroll) and the consequences of not complying with a reinstatement order.
    • Both: Ensure you understand the procedural requirements for enforcing labor rights and obligations.

    Frequently Asked Questions (FAQ)

    Q: What is a writ of execution?

    A: A writ of execution is a court order directing a law enforcement officer to take action to enforce a judgment. In this context, it compels an employer to comply with a reinstatement order.

    Q: What is the difference between actual and payroll reinstatement?

    A: Actual reinstatement means the employee is physically returned to their former position. Payroll reinstatement means the employee is placed back on the payroll and receives their salary, even if they are not physically working.

    Q: What happens if an employer refuses to comply with a reinstatement order?

    A: The employer can be held in contempt of court and may face penalties, including fines or imprisonment.

    Q: Can an employer deny backwages if the employee committed minor infractions?

    A: The Supreme Court has indicated that minor infractions may not justify the denial of backwages. The penalty should be commensurate with the offense.

    Q: What should I do if I believe I have been illegally dismissed?

    A: Consult with a labor lawyer as soon as possible to understand your rights and options. Time is of the essence in these cases.

    Q: Is there a deadline for filing a case for illegal dismissal?

    A: Yes, generally you have a limited time (e.g., within four years from the time the cause of action accrued) to file a complaint for illegal dismissal.

    ASG Law specializes in labor law and employment disputes. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Illegal Dismissal vs. Valid Retirement: Employee Rights and Employer Obligations in the Philippines

    Understanding the Nuances of Illegal Dismissal and Valid Retirement

    PANTRANCO NORTH EXPRESS, INC., vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) and REYNALDO M. RUEDA, G.R. No. 114333, January 24, 1996

    Imagine losing your job after years of service, not because of poor performance, but due to circumstances shrouded in ambiguity. This scenario highlights the critical importance of understanding the grounds for termination and the rights afforded to employees in the Philippines. The case of Pantranco North Express, Inc. vs. NLRC and Reynaldo M. Rueda delves into the complexities of distinguishing between illegal dismissal and valid retirement, emphasizing the need for employers to adhere strictly to legal procedures when terminating employment.

    This case revolves around Reynaldo Rueda, a long-time employee of Pantranco North Express, Inc., whose employment was terminated under circumstances that he claimed constituted illegal dismissal. The Supreme Court’s decision clarifies the specific requirements for validly dismissing an employee due to either serious misconduct or illness, and underscores the consequences of failing to meet those requirements.

    Legal Framework for Employee Termination

    The Labor Code of the Philippines provides a comprehensive framework governing the termination of employment. Article 282 outlines the just causes for termination initiated by the employer, which include serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or breach of trust, and commission of a crime against the employer or their family. Article 284 addresses termination due to disease.

    Specifically, Article 282 states:

    “(1) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (2) Gross and habitual neglect by the employee of his duties; (3) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (4) 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 (5) Other causes analogous to the foregoing.”

    For termination due to illness to be valid, Section 8, Rule 1, Book VI of the Implementing Rules of the Labor Code requires a certification from a competent public health authority stating that the disease is incurable within six months, even with proper medical treatment. This provision aims to protect employees from being unjustly terminated due to health conditions that may be treatable.

    Failure to comply with these procedural and substantive requirements can expose employers to claims of illegal dismissal, potentially resulting in significant financial liabilities.

    The Pantranco vs. Rueda Case: A Detailed Look

    Reynaldo Rueda’s employment history with Pantranco spanned several years, with a break due to a prior retrenchment. After being rehired, an incident involving a physical altercation with a co-worker led to administrative and criminal complaints. While the criminal case was settled, Pantranco initially considered dismissing Rueda for serious misconduct.

    However, instead of pursuing the misconduct charge, Pantranco opted to retire Rueda due to his medical condition, specifically tuberculosis. Rueda contested this decision, arguing that his retirement benefits should be computed from his original date of hire, not just from the date of his reemployment. He believed he was constructively dismissed. The timeline of events is important here:

    • May 14, 1956: Rueda was originally employed by Pantranco.
    • September 16, 1978: Rueda was retrenched and received separation pay.
    • February 9, 1981: Rueda was rehired by Pantranco.
    • June 29, 1987: The altercation with the co-worker occurred.
    • May 4, 1988: Rueda met a vehicular accident and went on sick leave
    • August 9, 1989: End date of Rueda’s sick leave.
    • October 29, 1990: Rueda filed an action for illegal dismissal.

    The Labor Arbiter initially dismissed Rueda’s complaint, but the NLRC reversed this decision, ordering Pantranco to pay separation pay computed from Rueda’s original employment date. Pantranco then elevated the case to the Supreme Court.

    The Supreme Court emphasized the importance of clarity in the grounds for termination:

    “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.”

    The Court found that Pantranco’s decision to retire Rueda due to illness was not supported by the required certification from a competent public health authority, rendering the retirement invalid.

    Practical Implications for Employers and Employees

    This case serves as a reminder to employers to strictly adhere to the procedural and substantive requirements outlined in the Labor Code when terminating employees. Ambiguous or shifting grounds for termination can be construed as illegal dismissal, leading to costly legal battles and potential liabilities. For employees, this ruling underscores the importance of understanding their rights and seeking legal counsel when facing uncertain termination circumstances.

    The ruling emphasizes the need for employers to provide clear and justifiable reasons for termination. It also highlights the importance of documentation and adherence to due process in employment decisions.

    Key Lessons

    • Clarity in Termination Grounds: Employers must clearly state the grounds for termination and ensure they are supported by evidence.
    • Procedural Compliance: Strict adherence to the procedural requirements of the Labor Code is crucial for validly terminating employment.
    • Medical Certification: Termination due to illness requires certification from a competent public health authority.
    • Documentation: Maintain thorough documentation of all employment-related decisions, including warnings, investigations, and performance evaluations.

    Frequently Asked Questions

    What constitutes serious misconduct under the Labor Code?

    Serious misconduct generally involves actions of a grave and aggravated character that demonstrate a wrongful intent. It must be related to the employee’s duties and responsibilities.

    What are the requirements for a valid retrenchment?

    A valid retrenchment requires proof of actual and imminent financial losses, the adoption of fair and reasonable criteria in selecting employees to be retrenched, and the payment of separation pay.

    Can an employer terminate an employee based on suspicion of wrongdoing?

    Generally, no. Termination must be based on clear and convincing evidence of just cause, not merely suspicion.

    What is constructive dismissal?

    Constructive dismissal occurs when an employer makes continued employment so unbearable that the employee is forced to resign.

    What remedies are available to an illegally dismissed employee?

    An illegally dismissed employee is typically entitled to reinstatement (if feasible), backwages, and potentially damages and attorney’s fees.

    How is separation pay computed?

    Separation pay is generally computed as one month’s salary for every year of service, or as otherwise provided in a company policy or collective bargaining agreement.

    ASG Law specializes in labor law and employment disputes. Contact us or email hello@asglawpartners.com to schedule a consultation.