According To The Supreme Court, Companies Can't Take Back Job Offers Without A Good Reason

This is something that should be common knowledge but often isn't: Employment starts the moment you sign the job offer. That’s what the Supreme Court (SC) reaffirmed in a recent ruling, saying that employers can’t just back out or claim “redundancy” unless they have solid evidence.

This decision follows the case of a worker who was accepted at a biotechnology company only to be told the job no longer existed before he could even report for his first day.

He had been offered a high-level position with a monthly salary of P140,000. After signing the offer, he resigned from his previous job. Weeks before his start date on July 1, 2016, however, the company informed him that the position had been abolished due to a “global restructuring.” They gave him a month's salary as a so-called  “goodwill payment”—and expected that to be the end of it.

Instead, the worker filed a complaint for illegal dismissal.

The Labor Arbiter (LA) initially ruled in the worker's favor, but the National Labor Relations Commission (NLRC) reversed the decision, saying no employer-employee relationship existed since Aragones hadn’t started working yet. The Court of Appeals agreed with the NLRC.

But the SC thought otherwise: it ruled that a job contract becomes binding once the offer is accepted. In this case, the worker's signature on the job offer was enough to form a legal employer-employee relationship, even if his start date was still months away.

Like the LA, the SC also rejected the company's claim that the role had been made redundant due to restructuring. Under the Labor Code, redundancy is only valid when that claim is backed by clear evidence, such as revised staffing patterns, feasibility studies, or approved restructuring plans.

The company submitted none of these. All they offered was an affidavit from their vice president saying the company wanted to shift from regional to local operations to better meet customer needs. The SC found this explanation “vague and general” as it was unsupported by documentation. It also didn’t clarify how or why the worker's specific role was eliminated.

“Indeed, redundancy is an authorized ground for dismissal under Article 298 of the Labor Code... However, in making such decision the management must not violate the law or act arbitrarily,” the SC explained in a 16-page ruling.

Since the worker no longer wants to return to the company, the SC ordered the company to pay him backpay and separation pay from July 1, 2016 to May 14, 2025—covering the period from when he was supposed to start working until the finality of the Supreme Court’s decision.

So if a company decides to pull this move on you (knock on wood), you'll know what to do.