Dismissal of Employees in the Philippines


Security of tenure is a constitutionally guaranteed right in the Philippines. Thus, for an employer to validly dismiss an employee, substantive and procedural due process under law should be complied with. Substantive due process means that the termination must be based on just and/or authorized causes for dismissal. On the other hand, procedural due process requires the employer to effect the dismissal in a manner specified in the Labor Code and its implementing rules (Deoferio v. Intel Technology Philippines, Inc., G.R. No. 202996, June 18, 2014).

Under Article 297 (previously Art. 282) of the Labor Code, as amended, the following are deemed just causes to terminate an employee:

  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 authorize representative; and

  5. Other causes analogous to the foregoing.

To comply with procedural due process when terminating an employee for a just cause, the following should be done:

  1. The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period or at least five (5) calendar days.

  2. After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management.

  3. After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment. [King of Kings Transport, Inc. v. Mamac, 553 Phil. 108 (2007)].

On the other hand, the following are the authorized causes of termination under Articles 298 and 299 (previously Arts. 283 and 284, respectively) of the Labor Code:

  1. Installation of labor-saving devices;

  2. Redundancy;

  3. Retrenchment to prevent losses;

  4. Closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of the Title; and

  5. Suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees.

To comply with procedural due process when terminating an employee for authorized causes, the following must be observed: (1) the employer should serve a written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of termination; and (2) the employer should pay the employee separation pay under the Labor Code.

This article does not constitute and is not intended to be legal advice. If you have any question or need any assistance, please feel free to send us an email at roselle.jean@nonatolaw.com.

#Termination #AuthorizedCauses #JustCauses #DueProcess #LaborCode

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