SC rules employee-employer relationship starts when job offer is signed
Supreme Court. File photo.
MANILA, Philippines — The Supreme Court (SC) has ruled that employer-employee relationships are formed the moment a job offer is signed.
Based on a 16-page decision promulgated on April 2, 2025 but made public Friday, the SC’s third division found a biotechnology company, Alltech, guilty of illegally dismissing a certain Paolo Landayan Aragones for failing to prove there was redundancy in the company.
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The case stemmed from when Alltech offered Aragones the position of Swine Technical Manager – Pacific with a monthly salary of P140,000 in 2016.
Once Aragones accepted the offer and quit his former job, Alltech suddenly informed him that the position for him was abolished due to a global restructuring and offered him P140,000 as a goodwill payment.
Aragones then filed a complaint for illegal dismissal, which the Labor Arbiter initially ruled in his favor.
However, the National Labor Relations Commission (NLRC) reversed the ruling as there was no employer-employee relationship yet because Aragones had not yet started working for Alltech.
The NLRC decision was also upheld by the Court of Appeals.
However, the SC, for its part, ruled that the employment contract was perfected as soon as Aragones signed the job offer, maintaining that even if his start date was still three months away, it did not mean there was no employer-employee relationship.
Thus, when Alltech withdrew the offer before his start date, the employer-employee relationship had already been established.
“It is not enough for a company to merely declare redundancy; it must produce adequate proof of such redundancy to justify the dismissal of the affected employees, such as but not limited to the new staffing pattern, feasibility studies/proposal, on the viability of the newly created positions, job description, and the approval by the management of the restructuring,” the order read.
The SC also found that the company did not explain how or why certain positions, like Aragones’, were suddenly removed in its affidavit.
With this, the SC found Alltech liable for the illegal dismissal Argones and is ordered to pay him:
- backwages computed from July 1, 2016 until finality of the Decision;
- separation pay equivalent to one month salary, for every year of service, starting from July 1, 2016 until the finality of this Decision; and
- attorney’s fees equivalent to ten percent of the total monetary award.
“The total judgment award shall also earn legal interest of 6 percent per annum, computed from the finality of the Decision until full payment,” the SC ordered.
“The Labor Arbiter is directed to compute the monetary awards in accordance with this Decision,” the decision further read.
