SC: Employer-Employee Relationship Begins Once Job Offer is Signed

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SC: Employer-Employee Relationship Begins Once Job Offer is Signed


The Supreme Court has ruled that an employer-employee relationship is established as soon as a job offer is signed—regardless of whether the employee has started working.


In a Decision issued on April 2, 2025 and released to the public on May 16, 2025, the Court found Alltech Biotechnology Corporation guilty of illegally dismissing Paolo Landayan Aragones. Alltech had offered Aragones the position of Swine Technical Manager – Pacific in 2016, with a monthly salary of ₱140,000.


Aragones accepted the offer and resigned from his previous job. However, before his start date, Alltech informed him that the position was abolished due to a global restructuring and instead offered him ₱140,000 as a goodwill payment. Aragones filed a case for illegal dismissal.


The Labor Arbiter initially ruled in his favor, but the National Labor Relations Commission (NLRC) reversed the ruling, saying there was no employer-employee relationship since Aragones had not started working. The Court of Appeals upheld this view.


But the Supreme Court disagreed. It ruled that the employment contract became effective once the job offer was signed. The fact that Aragones had not yet started working did not change the fact that an employer-employee relationship had already been formed. Therefore, when Alltech withdrew the offer, it committed illegal dismissal.


The Court also said Alltech failed to prove that the position was truly redundant. The company did not submit evidence such as a new staffing pattern, feasibility studies, or job descriptions to justify its claim.


As a result, the Supreme Court ordered Alltech to pay Aragones the following:


Backwages from July 1, 2016 until the finality of the Decision;


Separation pay equivalent to one month’s salary per year of service from July 1, 2016 until finality;


Attorney’s fees equal to 10% of the total monetary award.


The total award will also earn 6% legal interest per year from the date the Decision becomes final until fully paid.


The Labor Arbiter was directed to compute the final amounts due.


This ruling affirms that once a job offer is signed and accepted, both the employer and employee are bound—and cannot back out without legal consequences.


⚖️ G.R. No. 251736 (Paolo Landayan Aragones v. Alltech Biotechnology Corporation April 2, 2025)










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